Siemens Energy had €5.8 billion ($6.3 billion) wiped off its market capitalisation on Friday after warning that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years.
The group scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than €1 billion.
“This is a disappointing and severe setback,” Jochen Eickholt, chief executive of Siemens Gamesa, told journalists on a call.
“I have said several times that there is actually nothing visible at Siemens Gamesa that I have not seen elsewhere. But I have to tell you that I would not say that again today.”
Siemens Energy's share price plunge on Friday was the biggest since the group, which supplies equipment and services to the power sector, was spun off from Siemens and separately listed in 2020.
Shares were down 31.5 per cent at 0842 GMT, with traders and analysts pointing out that the extent of the company's latest problems was still uncertain.
“Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us,” Christian Bruch, chief executive of Siemens Energy, told journalists in a call.
The company’s finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.
“Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude,” analysts at JP Morgan said.
Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.
The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros.
Mr Eickholt said that while rotor blades and bearings were partly to blame for the turbine problems, it could not be ruled out that design issues also played a role.
Mr Bruch also blamed the corporate culture at Siemens Gamesa, the result of a merger of the wind turbine division of Siemens and Spain's Gamesa, saying: “Too much has been swept under the carpet”.
He said that the setback from the quality problems was “more severe than I thought possible”. At the same time, he said he did not believe that the full takeover of Siemens Gamesa had been a mistake.
Mr Bruch said that the company would be able to provide a more accurate estimate of the costs from the latest problems by the time it publishes its third-quarter results on August 7, after a full analysis of the situation.
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Killing of Qassem Suleimani
Empire of Enchantment: The Story of Indian Magic
John Zubrzycki, Hurst Publishers
COMPANY%20PROFILE
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
ICC men's cricketer of the year
2004 - Rahul Dravid (IND) ; 2005 - Jacques Kallis (SA) and Andrew Flintoff (ENG); 2006 - Ricky Ponting (AUS); 2007 - Ricky Ponting; 2008 - Shivnarine Chanderpaul (WI); 2009 - Mitchell Johnson (AUS); 2010 - Sachin Tendulkar (IND); 2011 - Jonathan Trott (ENG); 2012 - Kumar Sangakkara (SL); 2013 - Michael Clarke (AUS); 2014 - Mitchell Johnson; 2015 - Steve Smith (AUS); 2016 - Ravichandran Ashwin (IND); 2017 - Virat Kohli (IND); 2018 - Virat Kohli; 2019 - Ben Stokes (ENG); 2021 - Shaheen Afridi
UAE currency: the story behind the money in your pockets
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
The results of the first round are as follows:
Qais Saied (Independent): 18.4 per cent
Nabil Karoui (Qalb Tounes): 15.58 per cent
Abdelfattah Mourou (Ennahdha party): 12.88 per cent
Abdelkarim Zbidi (two-time defence minister backed by Nidaa Tounes party): 10.7 per cent
Youssef Chahed (former prime minister, leader of Long Live Tunisia): 7.3 per cent
Results
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Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
