Siemens Gamesa’s improved forecast increases its share price

Siemens Gamesa

Siemens Gamesa has confirmed it returned to net profit in the first quarter of the year, after the losses recorded in the same period of 2018. The rise in the turbine manufacturer’s forecast has increased its shares.

The company reported a net profit of €18 million between October and December 2018. This is an excellent step forward from a loss of €35 million in 2017. These figures come as a result if a lower fiscal impact and the fact it doubled integrations and restructuring costs.

The group anticipates that its earnings before interest and tax (EBIT) will stand between 7 and 8.5 percent throughout the year, standing over the 6.1 percent recorded in the first quarter, according to CEO Marcus Tacke.

The company, formed in 2017 through the merger of Spanish Gamesa with German subsidiary Gamesa, expects to upgrade its sales forecast, which would stand at €10-11 billion in 2019, up significantly from last year during the same period.

“We expect a stronger second half to the year thanks to the planning and execution of optimization projects and programs,” the spokesman said.

Positive results in net profits and order intake

However, Siemens Gamesa anticipates adverse conditions with material prices and volatility in emerging markets. The consortium is hoping to counter this scenario with productivity measures and its transformation program.

The company reported net profits of €18 million in the first quarter (October-December), a significant improvement from the €35 million loss in the same period a year before.

Siemens Gamesa also stated that the order book increased by €23 million in the third quarter, up by 8 percent, covering 92 percent of the revenue guidance for 2019.

With these figures, the firm presents a significant upgrade for the new business year.

Sales up by 6 percent

The sales of this Spanish-German firm went up by 6 percent year-on-year to €2.2 billion in the first quarter. With these results, the consortium’s reported EBIT amounted to €40 million, up by 13 percent. The rise was mainly prompted by the offshore wind and services businesses, with turbine sales increasing by 7 percent to 2.129 MWe, thanks to a strong contribution from the offshore segment, which sold 609 MWe, according to a report prepared by Bankinter.

The EBIT before PPA costs stood at €138 million, up by 4 percent. This figure, nonetheless, is still below the €149 million forecasted by Bloomberg analysts.

The upgrade impacted the firm’s shares

The publication of these results had a positive effect on the Spanish-German company in the stock market.

At first, investors were slightly disappointed by the results, as they expected a higher net benefit of around €0.13 per share.

In view of this, its shares initially fell by 2.5 percent.

However, they rebounded on the firm’s outlook and were up by 13 percent, leading the IBEX that day.

Siemens Gamesa has logged orders worth €11.5 billion in the last twelve months, up by 3 percent year-on-year; driven particularly by a 28 percent increase in onshore orders (€6.8 billion). Order intake increased to €23 billion, of which €15.7 billion are orders to be filled after the 2019 fiscal year.

For more information, check Energía16

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