Siemens posts its first quarterly loss in 12 years

German industrial group Siemens posted its first quarterly loss in nearly 12 years after being forced into a multibillion-euro writedown on its energy spin-off business and shutting down its 170-year-old operation in Russia.

The Munich-based company lost 1.5 billion euros in the three months to the end of June, compared to a net profit of 1.5 billion euros in the same period last year, despite growing revenues of 11% and a solid order book.

This loss is largely explained by a 2.7 billion euro write-down in the value of its stake in Siemens Energy, which was itself dragged down by Gamesa’s very loss-making wind subsidiary, as well as by a depreciation of 400 million euros linked to the liquidation of Siemens operations in Russia.

Shares of Siemens Energy, of which Siemens still owns 35%, have more than halved in the space of two years.

Gamesa, the world’s largest offshore wind turbine maker, has been saddled with onerous wind turbine contracts as raw material costs soar.

In May, Siemens Energy made a €4 billion bid to buy the remaining 33% of Gamesa, in order to take direct control of the struggling company.

Siemens’ results come a day after Gamesa rival Vestas reported a quarterly loss of €119m, with the Danish group citing a “very challenging business environment” including high raw material and component costs .

Roland Busch, chief executive of Siemens, said his company’s core business remained strong and had “the right offerings and the right strategy to succeed even in uncertain times”, despite the current headwinds. He added that restrictions on German gas supplies would only have “minor direct effects” on production at Siemens, which was not particularly energy-intensive.

Some companies have benefited from strong price increases. Steel and materials group ThyssenKrupp beat analysts’ forecasts on Thursday and nearly tripled its adjusted profit before interest and tax for the quarter to 721 million euros as revenue soared at its factory in Duisburg.

Steel’s smaller rival Salzgitter also sharply beat analysts’ expectations and posted 505 million euros in profit before interest and tax, up from 188 million euros in the same period of 2021, citing prices record for rolled steel.

However, the two companies depend on natural gas for production and have warned that further supply restrictions in Germany following the war in Ukraine could force them to cut production.

In addition, Siemens has announced its intention to replace its current auditors EY with PwC.

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