Siemens Gamesa shares slide after latest profit warning

The Siemens Gamesa logo is displayed outside the company’s headquarters in Zumudio, near Bilbao, Spain, November 28, 2017. REUTERS/Vincent West

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  • Siemens Gamesa warns of protracted supply chain issues
  • Stocks fall as much as 16%

MADRID/FRANKFURT, Jan 21 (Reuters) – Shares of Siemens Gamesa (SGREN.MC) fell on Friday after it cut its financial outlook for the third time in less than nine months, creating a headache for its parent company which has limited influence on the subsidiary.

The Madrid-listed company’s stock fell 16% to its lowest level since July 2020, while its German parent company, Siemens Energy (ENR1n.DE), which owns 67% of the wind turbine maker, lost also fell by more than 10%.

Siemens Energy cut off one’s prospects on Thursday after Siemens Gamesa warned of protracted supply chain problems, renewing pressure on the German company to fully take over the subsidiary to better manage its problems.

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Siemens Energy said it now expects an adjusted earnings before interest, tax, depreciation and amortization (EBITA) margin before special items to be in the 2% to 4% range this year, versus a forecast. previous 3% to 5%.

Siemens Gamesa executives blamed much of the blame for its first-quarter loss on continued supply chain disruptions due to the COVID-19 pandemic, and said they had reconsidered how they take project decisions.

“Today’s news is again disappointing,” chief executive Andreas Nauen told analysts on a conference call on Friday.

“Our development schedule was maybe here and there a bit optimistic and so we don’t pursue projects that might be too risky,” he said.

The company’s backlog stood at 33.6 billion euros ($38 billion) at the end of the first quarter, but 2 billion euros of those orders had no positive margin, said Beatriz Puente, CFO of Siemens Gamesa.

“Our worst fears are confirmed…due to the global supply chain situation, combined with the company’s inability to improve the situation of its onshore operations, which continues to hamper the group’s progress,” Spanish broker Renta 4 Banco said in a note.

The latest profit warning is expected to trigger new demands for Siemens Energy chief executive Christian Bruch to buy the remaining stake in Siemens Gamesa, worth around 4.3 billion euros, or seek other means of accelerating its recovery.

($1 = 0.8821 euros)

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Reporting by Isla Binnie and Christoph Steitz; Editing by David Clarke

Our standards: The Thomson Reuters Trust Principles.

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