Siemens AG saw orders largely stagnate in the fiscal first quarter as factory-automation purchases in China more than halved, offsetting gains in other units.
Orders plummeted 31 percent from a year earlier for the digital industries division, mainly driven by weaker private consumption in China, the company said yesterday. Siemens left its outlook for the unit and the overall group unchanged and said it sees the Chinese economy recovering later this year.
“The Chinese market is still very slow,” Siemens chief executive officer Roland Busch said. “We hope that we will see a pick-up in China in the second half of the year.”
Photo: REUTERS
Siemens and the rest of the industrial sector are grappling with weaker demand in China, where consumers and businesses have cut back on spending amid rising inflation and interest rates. The company expects China’s economy to recover in the second half of the year with the government’s push to boost high-tech manufacturing.
In recent years, Siemens has revamped its business to focus on software-driven product lines with higher profitability levels, and Busch has said Siemens could target larger acquisitions in that area this year. The company is also pursuing plans for an initial public offering or divestment of heavy-duty electric-motor manufacturer Innomotics, valued at roughly 3 billion euros (US$3.2 billion).
Siemens’ mobility unit saw orders nearly double from the same period a year earlier, largely due to two orders in Austria totaling 1.3 billion euros from existing agreements for delivery of trains.
Net income attributable to shareholders came in at 2.39 billion euros in the last quarter, boosted by a one-off 500 million euros gain from the transfer of an 8 percent stake in Siemens Energy AG to Siemens Pension-Trust e.V.
Some shareholders have urged Siemens to unload its stake in Siemens Energy, as the company posted massive losses from faulty wind turbines. Siemens said the transfer means it no longer has significant influence over Siemens Energy, and the investment is not expected to impact earnings per share going forward.
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