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Siemens Energy Q4 FY Results

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Siemens Energy is set to release its financial results for the fourth quarter of its fiscal year. Here are the key details:

Revenue and Orders

  • Revenue for the quarter is projected to be 8.65 billion euros ($9.25 billion), compared to 9.19 billion euros in the same period last year, as per a company-compiled consensus.
  • Orders are estimated to be around 8.22 billion euros, down from 12.23 billion euros.

Net Profit

  • Siemens is expected to report a net loss of 753 million euros, in contrast to a profit of 244 million euros in the previous year.
  • The loss before special items is anticipated to be 371 million euros, compared to a profit before special items of 564 million euros.

What to Watch

Guarantees

Investors will be closely watching the newly-outlined guarantees for long-term projects. The German government will be granting Siemens Energy a 7.5 billion euro guarantee as part of a total of 15 billion euros in lines of credit. Analysts at Berenberg suggest that this move is driven by the need to secure guarantees for the growing backlog at the gas & power division, rather than relying on substantial equity or asking the German state to cover losses at Siemens Gamesa.

Siemens India Stake Sale

The German government announced that Siemens Energy and Siemens are planning to negotiate the sale of shares in a joint venture, which is expected to bring in approximately EUR2 billion in cash for the German energy company. This move comes as Siemens Energy considers selling a portion of its 24% stake in listed affiliate Siemens India to its former parent company Siemens, in an effort to strengthen its balance sheet. By generating cash and reducing debt, this potential sale could help mitigate the need for a dilutive equity raise and maintain the investment-grade rating, according to analysts at Citi.

Full-Year Performance & Guidance

Siemens Energy stated that the results for fiscal 2023 are anticipated to align completely with the previously provided guidance. The gas & power business is expected to continue performing well. However, for the troubled wind business, it is projected that order intake and revenue will fall short of market forecasts in fiscal 2024. Additionally, as Siemens Gamesa works through its challenges, cash outflows are anticipated to be higher. An update on the recovery path of the business, along with longer-term targets at the group level, will be provided next week during the capital markets day.

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