Siemens Games Renewable Energy announced its latest quarterly-earnings last week, revealing record onshore order intake and a steady order book, despite the increasing pressure of a contracting and tight-fisted industry that is competing for every dollar earned.
It’s been just over a year since Spanish wind energy company Gamesa and Siemens’ wind power business completed their long-awaited merger and we thus won’t even see the results of the company’s first full year together for another few months. Announced last week, Siemens Gamesa published its second quarter financial results — the vagaries of global finances means that Siemens Gamesa’s financial year runs from October to September, making January to March its second quarter. And while recent activity and achievements have put the company in good stead, the second quarter was still nothing to move the earth beneath your feet.
Putting aside Siemens Gamesa’s ongoing litany of new orders for a moment — of which there were many — the company announced mid-last month that it had surpassed an impressive milestone in India, passing 5,000 megawatts (MW) worth of wind energy connected to the country’s grid, making it the second largest manufacturer in India.
A week later, two separate analyst firms published figures that showed Siemens Gamesa as the leading wind turbine manufacturer in 2017, surpassing rival Vestas for the top spot, less than a year after the company merged. Wood Mackenzie’s MAKE Consulting and GlobalData both published reports on original equipment manufacturers for the wind energy industry, and Siemens Gamesa topped both lists.
“The recent merger of Gamesa and Siemens created a strong position in the industry across the onshore and offshore space,” explained Ankit Mathur, Practice Head for Power at GlobalData, at the time. “The competitive advantage of larger size and scale, along with good geographic diversification, provided the necessary push enabling it to claim the top spot.”
So it’s been a good few months for Siemens Gamesa, and its second-quarter earnings report matched that up, despite the headwinds inherent in the wind industry at the moment, which includes decreasing and disappearing subsidies around the world, meaning supply chain costs have to drop in order to allow companies to compete in a competitive tender market.
Siemens Gamesa reported sales for the quarter of €2,242 million, down 29% year-over-year, but well in line with the company’s 2018 guidance and pushing its sales for the first half of the year up to €4,369 million. Earnings (before PPA, restructuring, and integration costs) sat at €189 million with EBIT margin increasing to 8.4%. Net income for the quarter was €35 million and a net debt position of €112 million.
Maybe most impressive was the company’s continued commercial activity, which pushed its order backlog up to an impressive €22,041 million in the second quarter — back to peak 2017 levels. The company benefited from its best onshore order intake ever with close to 2.5 gigawatts (GW) taken in during the second quarter, up 54% year-over-year — including the exclusive agreement to supply 1,386 MW to the Hornsea Project Two offshore wind farm, the world’s largest offshore wind farm.
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