North Sea offshore grid problems sting Siemens

Wind revenues surge and steady orders in challenging market

Problems with supply of grid connections for German North Sea offshore wind projects have burdened Siemens with additional costs of €570m in the fiscal year to 30 September 2012, a Siemens spokesman told Windpower Offshore today. In Q4 alone, these costs amounted to €67m, he said.

On the positive side, Siemens' wind activities are helping to boost orders in the group's energy division. Despite the continuing unfavourable economic climate, in Q4 of fiscal 2012 (July to September) orders to Siemens' wind energy division reached €2.3bn, nearly matching Q4 2011's €2.33bn. Both periods "included large offshore orders", the company stressed.

Siemens' wind power revenue in Q4 was up 35% to €1.47bn and wind power sector profit reached €134m, or 39% of Siemens' energy division profits of €346m in the quarter. Exact amounts for offshore wind alone are not being revealed.

Siemens has said it expects challenging market conditions, including substantial pricing pressure, to continue for its wind business in coming quarters.

The company aims to save €6bn annually and raise profit margins to 12% by 2014, through its Siemens 2014 programme announced today. It is too early to say how the wind division will be affected by this. Profit margin in the energy division, which includes onshore and offshore wind, was just 4.6% in Q4, having been dragged down by losses in oil & gas and power transmission.