Power-generating 2.37 megawatt (MW) Siemens wind turbines are seen on the Ocotillo Wind Energy Facility in California on May 29, 2020.
Bing Guan | Reuters
Shares of Siemens Energy rose 12% on Wednesday after the German renewable energy company raised its forecast for the 12 months and said it will replace the CEO of its troubled wind turbine division as a part of “extensive restructuring measures.”
A press release said Siemens Gamesa’s Jochen Eickholt had informed the board that he would step down from his position as CEO by mutual agreement on July 31 and be succeeded by Vinod Philip.
“In a very difficult situation at Siemens Gamesa, Jochen laid the central foundations for the urgently needed restructuring and new beginning within Siemens Energy. It is only fair to emphasize that the causes of the quality problems did not fall during his term as CEO,” said Christian Bruch, CEO of Siemens Energy in a press release.
It said Gamesa had initiated comprehensive restructuring measures and “long-term strategic development steps” to extend operating margins.
Strong demand for power grid equipment and the corporate’s “success” in stabilizing its wind business led Siemens on Wednesday to boost its forecast for the 12 months.
For the total 12 months, the corporate now expects comparable sales growth of between 10% and 12% and a profit margin before special items of between minus 1% and plus 1%. Previously, comparable sales growth of between 3% and seven% and a profit margin before special items of between 2% and 1% were forecast.
Siemens Energy experienced a difficult 2023. Problems with production errors at Gamesa forced the parent company to lose 4.6 billion euros ($4.94 billion). For the financial 12 months. An investigation into quality problems has been initiated within the wind turbine sector.
In June, at a very turbulent time for the stock, Siemens Energy scrapped its profit forecast and warned that Gamesa’s costly outages could drag on for years.
The wind industry has grown rapidly during the last twenty years and has reduced costs to the purpose where they’ll sustain with and sometimes undercut those of fossil fuels. At the identical time, efficiency was increased by ever larger turbines and dependence on government subsidies was reduced. But last 12 months’s problems had investors apprehensive that Gamesa’s troubles could possibly be a symptom of a broader problem within the industry.
Meanwhile on Wednesday, Siemens Energy reported a net profit of 108 million euros for the newest quarter and raised its outlook for “stronger growth and positive cash development.”
—CNBC’s Elliot Smith contributed to this text.
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