German industrial conglomerate Siemens AG yesterday reported a tentative start to its 2019-2020 fiscal year with falling profits, but said that it was on track to spin off its energy businesses in September.
Net earnings at the Munich, Germany-based group, whose products range from trains to factory equipment and wind turbines, fell 3 percent year-on-year in its October-to-December first quarter, to just under 1.1 billion euros (US$1.2 billion).
Weighing on the result were a slump into the red at wind power division Siemens Gamesa, driven by delays to major projects, as well as severance costs related to the first among more than 8,000 job cuts planned across the group over coming years.
Photo: EPA-EFE
“The first quarter started slowly as expected,” chief executive Joe Kaeser said in a statement.
Siemens has suffered both from the general global economic slowdown driven by trade conflicts in recent years, as well as a longer-term downward trend in demand for some of its big-ticket items, such as turbines for gas power plants.
Operating profit declined sharply at both its factory automation unit, down 32 percent, and the gas and power division, down 63 percent.
Despite the operating loss at Gamesa, the wind turbine arm boosted revenues 82 percent, taking in 4.6 billion euros to account for more than one-fifth of the group’s 20.3 billion euros total in the quarter.
The energy unit is slated to be bundled with the gas and power division into a new business called Siemens Energy, which is to be spun off later this year.
The company “will list Siemens Energy on the stock exchange in September as planned,” Kaeser said.
For the full year, Siemens forecast “moderate growth in comparable revenue” and earnings per share of between 6.30 and 7 euros, compared with 6.41 euros in its previous fiscal year.
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