Offshore blade issues hit Siemens results

GERMANY: The degradation of the leading edge of offshore blades has hit Siemens' results, contributing to pushing the wind division into a loss for the latest quarter and for the year.

Siemens did not name the models affected by the faults
Siemens did not name the models affected by the faults

The German manufacturer said it was impacted by EUR 223 million in charges for repairing blades on both offshore and onshore turbines, as well as inspecting and replacing main bearings in onshore turbines.

Head of the Siemens energy business Lisa Davis said that the blade degredation was due to "harsh weather conditions both onshore and offshore". She added that Siemens has "implemented a design change for leading edge protection" for new blades and will be implementing a "similar retrofit" for existing blades.

These faults resulted in a loss for the wind division of EUR 66 million in the quarter to the end of September. This compares with a profit of EUR 179 million a year before. Revenue remained steady at EUR 1.62 billion.

Siemens has previously had issues with faulty blades and bearings. Blade breakages on a number of onshore turbines last year caused the curtailment of 700 turbines worldwide. And in 2010, the company was forced to carry out maintenance work on four offshore wind farms after it was discovered the bearings in the 3.6MW turbines' were corroding.

In addition to the write down due to turbine faults in the latest quarter, the wind division's performance was adversely affected by a lower profit contribution from the higher margin offshore business. The division's margin slumped from 11.1% to negative 4% in the latest quarter.

However, there were some bright spots. There was a 19% growth in wind division orders in the fourth quarter to EUR 1.8 billion, boosted by several major offshore wind orders in the UK and Germany.

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