Industrial equipment maker Siemens AG said yesterday that net profit fell 17 percent to 1.457 billion euros (US$1.89 billion) as project delays held down profits and the uncertain global economy cut into order volume.
Chief executive Peter Loescher said the results showed that uncertainty about economic growth stemming from Europe’s debt crisis “have left their mark on the real economy” through weaker demand.
Revenue grew 3 percent to 17.9 billion euros. New orders, however, slipped 5 percent.
Loescher said the economic environment “would remain difficult in the second quarter and improve after that.” Nevertheless, the company would have to “work hard” to meet its goals for the year.
The Munich-based company on Tuesday said it took 203 million euros in charges from a delay in getting permission to connect offshore windfarms to the power grid in Germany. Loescher said that the company was in “an intensive dialogue” with German government officials on the windfarms.
The company said higher research and investment costs also reduced profit, as did delays in delivering new high-speed trains to German rail operator Deutsche Bahn AG. The train delay was caused by a supplier of equipment which needed to make sure the trains can run on both the German and French rail systems.
Siemens’ products include trains, power generators and transmission equipment and medical diagnostic machines.