Siemens Gamesa has ended the first quarter of fiscal year (FY) 2023 with a net loss of €884m, between October and December 2022, compared with a net loss of €403m in the same period in the previous fiscal year.
As of 31 December 2022, net financial debt totalled €1.9bn.
Siemens Gamesa’s EBIT pre PPA and before integration and restructuring costs amounted to a loss of €760m in Q1 FY2023, compared with a loss of €309m in Q1 FY2022, with an EBIT margin of -37.8%.
The turbine maker said economic performance during this period was severely impacted by the outcome of the evaluation of the installed fleet, mostly affecting the service business.
As disclosed in the preliminary results, during the recent evaluation of the installed fleet, the company detected an upward trend in the failure rate of certain components, resulting in higher-than-expected warranty and service maintenance costs.
Siemens Gamesa said it is already implementing mitigation actions to reduce the future impact as much as possible.
“The negative development in our service business underscores that we have much work ahead of us to stabilise our business and return to profitability.
“However, despite the extremely challenging macroeconomic and geopolitical context in which we find ourselves, we have seen progress in other areas, such as with our Siemens Gamesa 5.X platform, thanks to our Mistral program,” said Siemens Gamesa’s CEO Jochen Eickholt.
During the initial quarter of the fiscal year, Siemens Gamesa signed new orders worth €1.6 billion (-35% year over year), while the order backlog amounted to €33.7bn at the end of December 2022.
The new organisation effective from 1 January 2023, has been completed.
Integrating onshore and offshore manufacturing and technology activities will result in cost and quality improvements.
The company said progress has also been made with the restructuring, and a pre-agreement has been reached with employee representatives in Spain.