Despite reasonably stable revenues, Siemens' renewables pre-tax profits in the third quarter of 2011 were almost half the EUR122 million for the same period last year, down to €68 million. This drop means Siemens' renewables profit margin for the three months to June was 6.97%, down from 12.8% in Q3 2010, based on revenues of €975 million and €953 million respectively.
Speaking to analysts in Frankfurt when the results were announced at the end of July, Siemens chief financial officer Josef Kaeser said that he expected wind profit margins to remain at this lower level in the long term.
"We have made clear for some time already that the margins for renewables will settle when we look forwards at a middle-to-upper one-digit range," said Kaeser. "This applies especially for wind energy."
Speaking to Windpower Monthly, Siemens said that the halving of Q3 profits resulted from absorbing various costs associated with international expansion in a market with "strong price pressures". He added that the firm's EUR150 million investment in three R&D centres in Denmark, announced in June, would be likely to have an impact on profit margins going forwards.
Tumbling quarterly profits have impacted on annual renewables profits, which were €246 million for the nine months to 30 June 2010, but just €152 million for the first three quarters of this year, despite an increase in annual revenues.
Siemens also reported that the total value of its new orders in the renewables sector was €1,543 million for the three months to June 2011, down from €2,271 million in the corresponding quarter last year. However, despite this quarter's substantial year-on-year fall, the total value of new orders for 2011 so far is only marginally less than 2010, down to €4,455 million from €4,475.
In August, the firm announced it was restructuring its renewable division and separating wind from solar and hydro to focus on the "industrialisation and internationalisation" of its wind power business. The new Wind Power division will be headed up by Felix Ferlemann, currently head of the chassis systems division of Benteler Automotive. Current Siemens Wind Power CEO Jens-Peter Saul is likely to head up one of the three business divisions.