Shares jump as Siemens Energy ups outlook

8th May 2024 11:41

(Sharecast News) - Shares in Siemens Energy sparked on Wednesday, after the German group upped its full-year outlook on the back of strong quarterly numbers.

The clean energy specialist also announced a change of leadership at its troubled wind turbine unit, Siemens Gamesa, which has been rocked by technical problems with core products as well as surging inflation.

Current chief executive Jochen Eickholt is to step down "by mutual agreement" in July, to be replaced by Vinod Philip. The division will then be integrated into the group's management structure.

Christian Bruch, chief executive of Siemens Energy, said: "It is only fair to emphasise that the causes of the quality problems did not fall under [Eickholt's] tenure as chief executive.

"With the concrete implementation of the multi-year restructuring plan agreed today, the time has now also come for a generational change at Siemens Gamesa."

He added that the unit's turnaround remained the company's focus, noting: "To this end, we are staking steps to reduce complexity and create a more focused business."

The update came as Siemens posted a 22% fall in orders in the three months to 31 March to €9.5bn, driven by expected decreases at Siemens Gamesa. Comparable group revenues improved 4% to €8.3bn.

Profits before special items jumped to €170m from €41m, while basic earnings per share were €0.08, up from last year's €0.25 loss per share.

Siemens said that both its Grid Technologies and Transformation of Industry units had performed better than expected in the first half, prompting it to revise its full-year forecasts.

It now expects full-year comparable revenue growth in the range of 10% to 12%, up from 3% to 7% previously, while the profit margin before special items was forecast to be between -1% and 1%. The last forecast range was -2% to 1%.

Siemens Gamesa's revenues were also expected to "substantially" exceed those of the first half, driven by the continuous ramp-up in the offshore area.

Comparable revenue growth of between 10% and 12% was forecast for the division, up from 0% and 4% previously, although an anticipated €2bn loss was left unchanged.

As at 1130 BST, shares in Siemens had jumped 13%.

Bruch said: "Our strong development in the second quarter underscores the continued strong demand for our technology to power the energy transition and our success in stabilising the wind business.

"We have raised our outlook to reflect this positive development."