SGRE downgrades 2017 forecast

SPAIN: Siemens Gamesa Renewable Energy (SGRE) has been forced to downgrade its outlook for 2017 due to a markdown of assets in the US and South Africa.

Siemens Gamesa Renewable Energy's new factory in Tangier, northern Morocco

SGRE now expects its financial year, which closed on 30 September, will record underlying earnings before interest and taxes to be €790m, down from the €900m forecasted.

"This disclosure relates to the regular assessment of the carrying value of certain assets in inventory mainly for the United States and South African markets, which affect certain subsidiaries of Siemens Gamesa, to mark them down to their current estimated realisable value," CEO Markus Tacke said in a note to shareholders.

"The current market conditions and pricing pressure has resulted in the write–down of such inventories," Tacke added.

In August, SGRE recorded a fall in sales and revenues in its first financial quarter results since the merger. Revenues fell 7% year-on-year to €2.69 million in the results. Sales reached 1.96GW-equivalent, a drop of 25% compared with the same period last year, SGRE reported.

The manufacturer added it had made a minimum of €230 million in synergies following the merger of Siemens Wind Power and Gamesa earlier this year.

Speaking at the blade factory opening in Morocco last week, the group's onshore CEO Ricardo Chocarro said the integration of the two firms could be completed a year earlier in the third year of operation, instead of the fourth year as originally planned.

SGRE will report its full-year financial figures on 6 November. The manufacturer's share price opened 5.25% lower this morning (16 October) at €11.90/share.