Spain

Spain

Pricing pressures stunt SGRE recovery

SPAIN: Siemens Gamesa recorded a 17% fall in revenues in its full year financial results despite increasing its order book.

The SG 3.4-132 was Siemens Gamesa's top selling product this year
The SG 3.4-132 was Siemens Gamesa's top selling product this year

It stated a decline in turbine prices during the year, which runs from October to September, offset the recovery of its onshore orders and an increase in offshore orders.

The growth in orders is reflected in a new record backlog worth €22.8 billion.

However, the manufacturer’s revenue fell to €9.1 billion for the full financial year, with wind turbine revenue down 20% year-on-year to €7.85 billion.

Revenue from its operations and maintenance (O&M) services, meanwhile, rose 6% to €1.28 billion.

Order intake increased 9% to €11.87 billion due to a recovery of its onshore orders (up 30% to €6.68 billion), and "intense offshore activity", the manufacturer stated.

This 30% increase in onshore orders was dwarfed by the 42% increase in capacity, up to 8,962MW for the full financial year.

Average selling price (ASP) of Siemens Gamesa’s onshore turbines rose from €700,000/MW to €750,000/MW in the fourth quarter, but the €730,000/MW ASP for 2018 was down 9% year-on-year.

Meanwhile, offshore order intake increased 30% year-on-year to €6.68 billion. Capacity-wise it received orders for 2,272MW, up 31% year-on-year.

Siemens Gamesa received a firm order for nearly 1.4GW of turbines for the Hornsea Two project off the coast of the UK — of which just under 800MW was booked for the year — and signed preferred supplier agreements for 1.5GW in Taiwan.

It stated the decline in onshore wind turbine prices hit its Ebit margin (7.6%, up half a percentage point), although this was partially compensated by making more than €175 million in synergies and a strong performance in services.

Fourth Quarter

On a quarterly basis, Siemens Gamesa showed further signs of recovery.

Siemens Gamesa key figures Jul-Sep 17 Jul-Sep 18 Full-year 2017 Full-year 2018
Revenue (€ million) 2,305 2,619 10,964 9,122
Order intake (€ million) 2,791 2,625 10,917 11,872
Turbine order intake (MW) - - 8,053 11,234

Revenues from wind turbines and O&M services both increased in the fourth quarter — up 12% to €2.62 billion and 10% to €2.21 billion respectively.

The manufacturer envisages strong prospects in the wind sector, with a 4% CAGR (compound annual growth rate) of installations between 2017 and 2025.

"Positive developments in the long-term offshore ambitions with the new markets moving ahead with auctions" and the recently released IPCC report to create a sense of urgency in combatting climate change, the company added.

Appointment

The manufacturer has appointed current chief procurement officer of Siemens’ power and gas division Christoph Wollny as its first chief operating officer (COO).

Siemens Gamesa announced the creation of  the role during a reshuffle of its top team in October.

It said the job would "better address current and future market dynamics and further strengthen cost-cutting efforts".

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