Big offshore deal helps Siemens Gamesa narrow losses

Losses at Siemens Gamesa narrowed in its fourth quarter of its 2024 fiscal year as costs due to the known quality issues at the Siemens Energy unit’s 4 and 5MW onshore wind turbine platforms and ramp-up challenges in the offshore area continued to drag on results.

Orders were moderately down, by 2.8%, to €4.15bn ($4.4bn) in the fourth quarter that ended in September, compared to the same period a year earlier, as an increase in the offshore business didn’t offset declines in the onshore and service areas.

Offshore growth was driven by a single large order in the North Sea worth €2.9bn, while onshore orders continued to be depressed by the interruption of sales in the 4.X and 5.X platforms since late last year.

Revenue grew by 19.7% in the period to €3.08bn, driven by the offshore business.

The turbine unit still posted a loss of €472m in the fourth quarter of 2024, but that was narrower than the €670m loss in the year-earlier period. The loss still reflects higher planned costs due to the quality issues, as well as increased product costs and ramp-up challenges in offshore.

Siemens Energy continues to assume that Siemens Gamesa will break even in 2026, after resuming sales activities for the 5.X onshore turbine in 2025.

Revenues at parent group Siemens Energy rose due to good results in Grid Technologies and the narrowed loss at Siemens Gamesa, leading to a narrowed loss at the whole company of €115m in the fourth quarter, compared to a loss of €551m in the year-earlier period at Siemens Energy.

“In a pivotal fiscal year 2024, we achieved all our goals, driven by strong orders and project execution across all our businesses,” Siemens Energy CEO Christian Bruch said.

“Our focus remains on profitable growth, supported by highly favourable market conditions. The new mid-term targets until fiscal year 2028 reflect our leading role in the energy transition.”

Siemens Energy is now targeting high single-digit to low double-digit comparable revenue growth until fiscal year 2028.

It also targets a profit margin of 10% to 12% in fiscal year 2028, compared to ‘8% or above’ as previously assumed.

For the wind turbine unit Siemens Gamesa, the company still expected a break-even only in 2026, while it sees an operational profit margin of 3-5% in 2028.

"Next year we will still have a substantial loss at Siemens Gamesa," Bruch said.

"This also means, of course, that we are going to continue working on the cost structures. Underutilisation cannot be tolerated here."

Due to the falling revenue from onshore and reductions in capacity utilisation, the company will have to continue "with a reduction in positions".

While offshore will still be ramped up further, in onshore "we have to reduce the number of factories. Sometimes we dispose of factories, which has been done abroad. This is being done, and it will continue to be done in 2025 and 2026," Bruch said, but added that all will be carried out in coordination with employee representation.