Siemens Energy soars in Q2, with record profits and brighter future
Siemens Energy Experiences Remarkable Success During Recent Quarter, Revealing Notable Growth - Siemens Energy posts record-breaking quarter, continues upward trajectory.
Siemens Energy is riding high, leaving behind the challenges of the past and heading towards a prosperous year. Their most successful quarter since becoming an independent company has seen them make nearly half a billion euros in profit, almost five times the amount from the same period last year. While the subsidiary Siemens Gamesa still weighs them down, other sectors are thriving so much that Energy has significantly increased their forecast for the year. Even the new US tariffs aren't causing too much worry.
"A bit annoying, but manageable" is how Bruch, the Energy CEO, describes the impact of tariffs. The company estimates the financial burden in the remaining two quarters of the fiscal year to be in the high double-digit millions. Compared to the recent predictions from German automakers, this is relatively low. These setbacks are very much offset by the recent strong development.
Revenue and order intake also saw a boost in the second quarter, with an increase of around 20% to almost €10 billion. Order intake was €14.4 billion, more than doubled, and Bruch calls it an 'order boom'. He attributes this growth to the increasing demand for electricity. Energy has now raised their forecast from a result around the break-even point to up to €1 billion in profit. "The improved outlook reflects our confidence in the ongoing market opportunities as well as our exceptional project execution," says Bruch.
Previously, issues with specific projects, particularly concerning Siemens Gamesa, lowered the overall company numbers. However, Energy is confident that they have finally managed to control these problems. Yet, the struggles at Gamesa are not entirely over. Despite strong numbers in the business with turbines and their maintenance, as well as with power grid technology, Gamesa is still battling issues with two essential types of onshore wind turbines. It's expected that they will reach the break-even point for these areas next year. If other sectors continue to perform as well as they are now, Energy is set to reach new heights in earnings.
First, however, the company needs to stick to their current forecast. If they succeed, it would mark the first annual profit since the spin-off from Siemens in fall 2020 – this achievement was made last year, but primarily due to gains from selling shares in Siemens India. This time, the profit would come from their own strength.
Dividends for shareholders will not be paid this year, explains Bruch, due to the state guarantees that the company received two years ago to secure their full order book. Although Energy expects to shed these guarantees during the course of the fiscal year, they will only be able to pay a dividend for earnings generated in the following year, potentially reachable as early as 2027. Nevertheless, shareholders had a reason to celebrate on Thursday, as Siemens Energy was one of the top performers on the stock exchange.
- Keywords: Siemens Energy, Q2 results, strong performance, (Munich, Siemens AG, CEO, Christian Bruch, Gamesa)
- Despite the challenges posed by specific projects, particularly those involving Siemens Gamesa, Siemens Energy is confident they have managed to control these problems, leading to a strong performance in Q2, recording almost half a billion euros in profit.
- The improved outlook for Siemens Energy reflects their confidence in the ongoing market opportunities and their exceptional project execution, with revenue and order intake increasing by around 20% to nearly €10 billion.
- Siemens Energy expects to shed the state guarantees received two years ago during the course of the fiscal year, potentially allowing them to pay dividends to shareholders in 2027, provided they continue to achieve strong performance.
