Norway

Norway

SGRE lowers 2020 guidance after project delays

Siemens Gamesa (SGRE) has lowered its guidance for its 2020 financial year after the early arrival of winter weather prevented the manufacturer from carrying out installations at five wind farms in northern Europe.

Early winter weather and adverse road conditions hit project installations for SGRE (pic: Monika Ludvigsen)
Early winter weather and adverse road conditions hit project installations for SGRE (pic: Monika Ludvigsen)

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In a stock exchange filing, CEO Markus Tacke explained that adverse road conditions and snow had “detrimentally impacted the installation window” of five projects with a combined capacity of 1.1GW, mostly in Norway.

He added the delays had caused “unforeseen one-off charges” worth about €150 million.

As a result, SGRE lowered its expectations for its 2020 Ebit margin to 4.5-6%, below the previous guidance of 5.5-7%. 

The manufacturer also reported preliminary first-quarter revenue of €2 billion, down 12% year on year, and a €136 million loss of earnings, down from a €138 million profit one year earlier.

SGRE's share prices fell 10.2% to €14.10/share during early trading on 30 January, before a partial recovery to €14.40/share by midday.

SGRE is “putting in place remedy actions to turnaround the execution track record in the project pipeline in northern Europe and does not expect to see further impact from such execution in coming quarters”, Tacke added. 

The manufacturer is due to release its results for the first quarter of its 2020 financial year on 4 February.

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