Siemens Gamesa has cut its predicted full-year profit margin after first quarter 2020 earnings fell 12% due to “unforeseen” charges of €150m associated with problems on projects totalling 1.1GW in Northern Europe.
The German-Spanish manufacturer expects an EBIT margin pre PPA and I&R costs for fiscal 2020 of between 4.5% and 6%, down from the 5.5%-7% guidance previously issued.
This comes after preliminary results for the first three months show revenue at €2bn, down from €2.3bn for the year-ago period.
Siemens Gamesa blamed “adverse road conditions and an early arrival of winter weather” on the five projects, mainly in Norway, for the fall.
The issues “have delayed project execution substantially and detrimentally impacted the installation window”.
“The company is putting in place remedy actions to turnaround the execution track record in the project pipeline in Northern Europe and does not expect to see further impact from such pipeline execution in coming quarters,” added a statement.
Shares in Siemens Gamesa were trading down almost 7% following the news.
However, the company said overall commercial performance remains strong with an order intake of €4.6bn. Activities in offshore wind and servicing are unaffected.
Full details are expected on 4 February when the first quarter results are announced.