Energy woes leave Siemens’ confidence undimmed

BERLIN: German industrial conglomerate Siemens lifted its annual forecasts yesterday, saying it booked a good second quarter despite troubles at its energy divisions and a new restructuring plan.

Net profit at the group increased 39 per cent year-on-year between January and March, the second three months of Siemens’ financial year, to just over 2.0 billion euros (US$2.4 billion).

Revenue at Siemens – which builds products from giant gas turbines and trains to medical scanners – was flat at 20.1 billion euros.

But the group reported slightly lower orders as demand fell for wares with the heftiest price tags like wind turbines.

“Most of our businesses, primarily our digital offerings, showed impressive performance and operationally more than offset structural challenges in fossil power generation,” chief executive Joe Kaeser said.

Revenues slumped 28 per cent at the power and gas division, with Siemens blaming ‘structurally’ lower demand as global energy trends divert towards renewables.

Some 7,000 jobs are set to be slashed at the unit, although powerful union IG Metall secured promises Tuesday that the group’s Berlin Dynamowerk factory and another in Goerlitz on Germany’s border with Poland would be saved.

There was a mixed picture across the rest of Siemens’ activities, with 10-per cent growth in profits at its trains division and a 40-per cent increase at its factory automation arm.

But profits fell at wind-turbine unit Siemens Gamesa and at the Healthineers medical devices business, which pulled off a successful stock market flotation in March.

Looking ahead to the remainder of its financial year, Siemens lifted its forecast earnings per share to between 7.70 and 8.00 euros, up from a previous range of 7.20 to 7.70.

The group also expects “modest” growth in revenue, adjusted for currency and portfolio effects, and a profit margin in its industrial activities of between 11.0 and 12.0 per cent. — AFP