Siemens Energy Vows to Improve on Profit After Losses Narrow

(Bloomberg) --

Siemens Energy AG said it expects to make significant headway in 2022 on becoming profitable after losses narrowed this year.

The engineering firm reported a full-year loss of 560 million euros ($649 million) in the fiscal fiscal year ended September, it said Wednesday. That’s roughly a third of what the manufacturer lost in 2020 but still exceeded analyst projections.

“The group management expects a very strong improvement with regard to the goal of achieving a positive result,” the company said in a statement.

Losses at the struggling Siemens Gamesa Renewable Energy SA unit continued to weigh on profitability even as other businesses showed signs of improvement. Raw-material costs have surged this year as demand recovers amid easing pandemic restrictions, stoking inflation and complicating the company’s turnaround. 

Siemens Gamesa’s wind turbines -- some as tall as skyscrapers -- require a range of commodities from steel to copper and plastics to make them. The unit has struggled to pass on rising material prices to customers, weighing on the parent’s margins.

READ: Wind-Turbine Makers Plunge as Steel Prompts Profit Warning

Adjusted earnings before interest, taxes and amortization at the Gas and Power division, another unit undergoing restructuring, improved to a loss of 67 million euros in the fourth quarter, from a loss of 194 million euros in 2020. The unit has benefited from contracts to upgrade Germany’s electricity grid and a deal to supply an offshore wind farm in the U.S.

Siemens Energy is trying to overhaul the business as it’s roiled by the shift to renewable energy. The company has cut staff as it downsizes for lower demand for the fossil fuel-powered turbines it manufacturers.

©2021 Bloomberg L.P.