German industrial conglomerate Siemens AG yesterday said that it is sticking to its targets for 2018-2019 after a steady second quarter, having announced a spinoff of its power and gas unit a day before.
Net profits at the group fell 5 percent year-on-year to 1.9 billion euros (US$2.13 billion) from January to March.
Revenues were up 2 percent adjusting for currency effects at 20.9 billion euros.
This year “we enter into a new era to become an even stronger and more focused Siemens,” chief executive officer Joe Kaeser said in a statement.
Siemens is slimming down via successive spinoffs and flotations of units that no longer fit into its bosses’ vision.
By September next year, the power and gas unit with its oil and gas, gas turbines, power transmission and related services businesses is planned to be listed separately on the stock market.
Siemens plans to remain a “strong anchor shareholder” with a blocking minority holding in the new company.
While the fossil fuels business is disliked by shareholders and has struggled with profitability in the past few years, it lifted its operating margin to 5.6 percent in the second quarter, on adjusted revenue down 6 percent at 2.8 billion euros.
Outstanding orders at the unit were steady at 3.2 billion.
By contrast, rail, another flagship division, saw large contracts for trains — including in the US and Germany — help swell the order book 42 percent to 3.5 billion euros.
However, there was no clue from Siemens about a strategy for its mobility activities, after its planned merger with France’s Alstom SA was blocked by the European Commission.
The group also saw a stable performance at its “digital factory” automation business, an investor favorite with operating profit margins amounting to 19.6 percent on revenue of 3.4 billion euros.
Looking ahead to the full year, Siemens remained cautiously confident, aiming for “moderate growth in revenue” and a profit margin of 11 to 12 percent in its core industrial businesses, adjusting for portfolio and currency effects.
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