FRANKFURT (AFP) – Shares in Siemens Energy plummeted on Friday after the company warned that technical problems at its wind turbine unit were worse than previously thought.
The group scrapped its full-year profit target and said it was setting aside more than EUR1 billion (USD1.1 billion) over the coming years to fix the issues at troubled wind turbine subsidiary Siemens Gamesa.
In a call with reporters, Siemens Gamesa CEO Jochen Eickholt said “the quality problems go well beyond what had been known hitherto”.
“The result of the current review will be much worse than even what I would have thought possible,” he added.
Shares in Siemens Energy plunged by more than 30 per cent shortly after trading opened in Frankfurt, and ended the day about 37 per cent lower.
Siemens Energy issued an ad-hoc statement late on Thursday saying it had ordered a technical review following a “substantial increase in failure rates of wind turbine components”.
The company also withdrew its profit guidance for the fiscal year, without giving an updated estimate.
Earlier this year, Siemens Energy said it was expecting a net loss that would exceed the previous fiscal year’s loss of EUR712 million.
In the call with reporters, Siemens Energy CEO Christian Bruch called the developments “bitter” and “a huge setback”.
Siemens Gamesa – created from the merger in 2017 of Spain’s Gamesa and the wind energy division of German conglomerate Siemens – has been facing difficulties for years linked to soaring commodity prices and technical woes.
At the heart of the latest troubles are faulty components, mainly related to bearings and rotor blades in onshore turbines, Eickholt said.
The company has seen just “a handful of failures” across a fleet of several thousand turbines, he said, but it now had to assess “what to expect over the next 20 years” and which preventative measures to take.
