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Siemens absorbs €32 million third party component provision

GERMANY: Siemens renewable energy division has been hit by a €32 million supplier provision relating to a component supplied by a third party supplier.

Siemens has been hit by high R&D costs on products like its 6MW offshore turbine
Siemens has been hit by high R&D costs on products like its 6MW offshore turbine

The cost was revealed in the company's Q3 results, which showed the renewable division's operating profits to be €36 million, a fall of 47% compared to the same period last year.

Additionally, Siemens said orders for Q3 were €525 million, a 66% fall when compared to Q3 2011.

Siemens did not reveal who supplied the component or what it was. Other costs included a €20 million cost related to capacity adjustment and "increased expenses" for wind research and development. The main Siemens development product has been the 6MW offshore turbine.

The issues with third party components comes after Vestas admitted a similar problem earlier this year. In May, the company said there were failures on 376 of its V90 3MW gearboxes while announcing a net loss of €162 million for Q1 2012. The gearboxes were supplied by ZF.

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