Siemens Energy is reviewing the structure of Siemens Gamesa, it said on Wednesday, in a bid to return the struggling wind division that caused a 4.6 billion euro ($5.0 billion) annual net loss for the group to profit.
Siemens Energy on Tuesday secured a 12 billion euro credit line from private banks that was partly backstopped by the German government, removing a major concern for investors that feared the group could lose out on business without the funds.
A producer of key equipment such as gas turbines, converter stations and wind turbines, Siemens Energy is viewed by the German government as vital to its energy transition from fossil fuels to renewables.
The group, which was spun off from Siemens AG in 2020, said it had made no further provisions for faulty onshore turbine platforms following an analysis of its fleet. In August, it set aside 1.6 billion euros to tackle the problem.
“I am encouraged that the data from the installed onshore turbines confirm our previous findings,” CEO Christian Bruch said.
“Our strong balance sheet remains a top priority, and Siemens Energy’s vital role in the energy transition will continue to drive our growth and success in the years ahead.”
Frankfurt-listed shares in Siemens Energy were up 5.8% at 0907 GMT.
Siemens Energy said it would review the “scope of Siemens Gamesa’s activities”, which includes the manufacturing of blades and turbines, adding more details on what that meant would be revealed at the group’s capital markets day on Nov. 21.
Sources told Reuters last month that the group was considering shutting factories and sales offices as well as outsourcing production of some components to third parties.
Bruch said there were no concrete plans for job cuts or factory closures in Spain as of now.
He said there were also discussions ongoing about selling parts of the company which sell one product to a particular market, but gave no concrete details.
Siemens Gamesa, once considered the future growth driver for Siemens Energy, has become a millstone around the group’s neck after deeper-than-expected wind turbine quality issues were disclosed in June.
The division, created in 2017 through the merger of Siemens AG’s wind business and Spain’s Gamesa, is now only expected to break even in the 2026 fiscal year, Siemens Energy said, two years later than previously envisaged.
In 2024, it is expected to post a 2 billion operating loss.
As part of the financial backing agreed with stakeholders, Siemens Energy said it would sell an 18% stake in Indian firm Siemens Ltd to Siemens AG at a discount of 15%, confirming a previous Reuters story.
Asked about the potential need for a capital raise, Chief Financial Officer Maria Ferraro said Siemens Energy had several options to strengthen its balance sheet.
(Reporting by Christoph Steitz; Editing by Linda Pasquini, Mark Potter and Jan Harvey)