Siemens Gamesa Renewable Energy SA replaced its chief executive officer after project delays and cost overruns led to profit warnings at the subsidiary of Siemens Energy AG.
Jochen Eickholt, a Siemens Energy executive board member, will succeed Andreas Nauen as CEO on March 1. Eickholt, 60, has a track record of restructuring struggling businesses and will be charged with fixing the issues that have plagued Siemens Gamesa.
“His proven ability to turn around underperforming businesses and his vast leadership experience will be key elements to successfully implement the necessary changes and improvements at Siemens Gamesa,” Siemens Energy chairman Joe Kaeser said in a statement.
Siemens Gamesa on Thursday reported a net loss of 403 million euros (US$455 million) for the first quarter, missing expectations by a wide margin.
Turbine makers are grappling with rising commodity costs and pandemic-related disruptions to supply chains. Surging prices for energy, steel and copper have squeezed profit at Siemens Gamesa and its rivals. That is leading to tough conversations with customers, who may not be able to cope with higher expenses.
Siemens Gamesa is also facing difficulties scaling up one of its new turbine models, known as the 5.X platform. Volatile markets have impacted investment decisions by some of its customers, resulting in project delays. Siemens Gamesa reported a loss of 309 million euros for the first quarter of its 2022 fiscal year and warned that inflation will continue to weigh on margins.
The issues at the Madrid-based company already weighed on Siemens Energy’s results last year, frustrating the German firm’s management and fueling speculation the parent might try to buy out other investors to seize full operational control.
Analysts at Bernstein said Eickholt’s appointment as CEO could pave the way for Siemens Energy taking full control of the unit, noting his experience in turning companies around ahead of a transaction.
Siemens Energy last month lowered its full-year outlook due to mounting losses at its renewable subsidiary.
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