Siemens Energy experienced a notable turnaround in its financial performance during the first quarter of the fiscal year, driven by a surge in orders and a significant one-time gain from divesting its stake in its Indian affiliate to its parent company, Siemens.
The company, headquartered in Germany and specializing in renewables, reported a robust net profit of 1.58 billion euros ($1.7 billion), propelled by the sale of its 18% ownership in India’s Siemens Limited, fetching 2.1 billion euros.
Orders for Siemens Energy soared by 23.9% year-on-year, reaching 15.4 billion euros, resulting in a book-to-bill ratio of 2.01 and catapulting the order backlog to a record high of 118 billion euros.
Revenue climbed by 12.6% compared to the previous year, totaling 7.6 billion euros on a comparable basis, with exceptional performance observed in the grid technologies segment.
The company saw a positive swing in profit before special items, registering 208 million euros compared to a loss of 282 million euros for the same period last year, primarily due to approximately 500 million euros in quality-related charges faced by its wind turbine subsidiary, Siemens Gamesa.
However, free cash flow dipped to negative 283 million euros, attributed mainly to cash outflows from Siemens Gamesa, which faced operational challenges and an increase in working capital during a traditionally weaker quarter.
Siemens Energy encountered difficulties in 2023, primarily stemming from manufacturing issues at Siemens Gamesa, resulting in a hefty loss of 4.6 billion euros for the fiscal year. Investigations into the quality concerns at the wind turbine division are ongoing.
Maria Ferraro, the Chief Financial Officer of Siemens Energy, expressed satisfaction with the positive momentum observed across the company’s operations and the robust order intake. She highlighted ongoing efforts to address quality issues within Siemens Gamesa and emphasized the significant backlog in the offshore business, signaling a commitment to fulfilling orders efficiently.
Orders within the grid technologies division surged by 32.9%, reaching 8.24 billion euros, with Ferraro expressing confidence in the division’s continued momentum, particularly as countries worldwide prioritize advancing their green energy agendas.