Siemens confident for coming year after strong 2016/17

FRANKFURT AM MAIN (AFP) – German industrial behemoth Siemens reported a leap in profits in its 2016/17 financial year, meeting its own forecasts as the group continues a long-term restructuring.

Net profits at the group, whose products range from wind turbines to trains to medical equipment, grew to 6.0 billion euros, up 11 per cent compared with the previous year.

Operating, or underlying profit grew 12 per cent year-on-year, to 8.3 billion euros, while revenues added 4.3 per cent to top 83 billion euros.

Chief executive Joe Kaeser praised the “excellent results” in a statement, but warned that “we have to tackle structural issues in some individual businesses” in the coming year.

The group’s power and gas division, which makes the turbines and generators at the heart of fossil-fuel plants, saw lower profits as prices fell and the unit saw fewer new orders.

Flags hang in front of the headquarters of German industrial conglomerate Siemens prior to the company’s annual press conference in Munich, Germany. – AP

Profits also fell at the group’s wind power unit, which merged with Spain’s Gamesa earlier this year and announced some 6,000 job cuts Monday despite increasing orders.

Meanwhile, other divisions including the trains, factory automation and health businesses reported increasing profits.

Looking ahead to the 2017/18 financial year, Siemens predicted a “mixed picture in our market environment”, with continuing headwinds for its energy units from an unfavourable business cycle and “geopolitical uncertainties that may restrict investment sentiment”.

The group forecast “modest growth in revenue” and a profit margin of between 11 and 12 per cent for its industrial businesses.