Siemens Gamesa Renewable Energy (SGRE) posted a net loss of €165 million in the first quarter of the year. In spite of this, and the economic impact of the global pandemic, the German-Spanish firm considers it is “well positioned to capture growth in the sector, thanks to its geographical diversification and technological leadership.”
The company’s optimism is mainly based on a rise in its order intake, which hit record highs. Other aspects include its financial solvency and the outlook for renewable energy growth.
— Siemens Gamesa (@SiemensGamesa) May 6, 2020
In its report, the first one presented during the COVID-19 pandemic, Siemens Gamesa is reporting short term losses, but a positive outlook for the future.
Coronavirus has had “a direct impact of €56mn on the company’s profitability. This complicated situation further intensified the challenges in the onshore business, mainly in the Indian market and the execution of projects in Northern Europe,” according to the report.
Moreover, the pandemic has also had an impact on the company’s revenues and returns. Revenues fell by 8% between January and March, to €2,204mn, affected by lower sales of wind turbine generators. Revenues in the first half amounted to €4,204mn (-9.6% YoY).
New measures to minimize the impact
As part of the fight against the coronavirus, the company is implementing new solutions to ensure the continuity of operations. These measures include re-routing certain supply chains and optimizing remote monitoring to guarantee service operations. Similarly, it is also working on extending the periods for maintenance teams working at sea.
On the other hand, it highlights its “solid balance sheet and healthy liquidity”; with credit lines amounting to €4 billion, against which it was drawn just €1 billion.
“The long-term prospects for the industry and Siemens Gamesa remain sound,” it stressed.
The company recalls that according to the International Energy Agency “renewables will account for two-thirds of total capacity installed by 2040, with a sustained level of installations averaging 57 GW per year.”
CEO Markus Tacke said: “We are experiencing a situation without precedent that has changed our lives in just weeks. Siemens Gamesa considers that the renewables industry must play a key role in the economic recovery to move towards a sustainable energy model that generates quality jobs. It is in our hands to avoid another crisis: the climate crisis.”
While the rapidly evolving COVID-19 pandemic has negatively impacted our Q2 results, we also have a record order backlog and a strong liquidity position providing a strong base for our future.#SGREsultshttps://t.co/knJXYMMd0U
— Markus Tacke (@MarkusTacke) May 6, 2020
Record order intake
Siemens Gamesa registered a record order backlog of €28.6 billion (+21%) in this FY (October 2019-March 2020). This rise “sustains good long-term prospects” it assured.
This figure was achieved after signing €6,830mn (+36% YoY) in the first half and integrating the Service assets acquired from Senvion. Order intake between January and March amounted to €2,203mn (-11% YoY). This drop reflects “the normal volatility of the offshore market and the impact of COVID-19 on the signing of onshore contracts, some of which were deferred to subsequent quarters.”
On the other hand, onshore order intake in the last twelve months increased to 9,485 MW (13% YoY) despite the 6% YoY reduction in the second quarter to 1,645 MW. Offshore order intake in the last twelve months increased by 56% YoY to 2,879 MW.
In the second quarter, the company signed a preferred supplier agreement with Ørsted for the Borkum Riffgrund 3 (900 MW) and Gode Wind 3 (242 MW) wind farms, raising the conditional pipeline to 10.7 GW. “Siemens Gamesa is the clear leader in this segment, with firm orders for 5.5 GW,” it highlighted.
Meanwhile, the services unit logged €3.8 billion in orders over the past 12 months (+75%); and €779 million in orders in the second quarter (+4%).
For more information, check Energía16