Siemens Gamesa Renewable Energy SA announced late Wednesday that it now expects a negative operating margin for the full fiscal year as higher provisions resulted in an operating loss in the third quarter.
The Spanish renewable energy company SGRE,
a subsidiary of the German Siemens Energy AG ENR,
said it had an adjusted loss before interest and taxes of 150 million euros ($ 177.6 million) in the three months ended June, compared to 161 million euros for the same period last year. Sales reached 2.7 billion euros after 2.4 billion euros previously.
In the previous quarter, Siemens Gamesa achieved adjusted earnings before interest and taxes of 111 million euros.
The reassessment of profitability due to increased raw material prices and costs in connection with the 5.X onshore turbine platform, particularly in Brazil, led to provisions of around 229 million euros in the reporting period, Siemens Gamesa announced.
In light of the results, the company has updated its guidance for the full fiscal year. Siemens Gamesa now expects an EBIT margin of between minus 1% and 0% for 2021, after a margin of 3 to 5% was previously forecast. The company also expects sales at the lower end of the target range of 10.2 to 10.5 billion euros, which it had already reduced from 10.2 to 11.2 billion euros in April.
The company said it will work to increase profitability through cost-cutting and efficiency measures, particularly on the 5.X platform.
Write to Joshua Kirby at [email protected]; @joshualeokirby