Siemens Gamesa has released a profit warning about its first quarter results. "The performance of the quarter has been impacted by material and unpredictable costs of an exceptional nature amounting to 150 million euros in a portfolio of five Onshore projects (1.1 GW) located in Northern Europe (mainly in Norway), motivated by poor state of the routes and the anticipated arrival of winter weather, which have substantially delayed the execution of the projects and negatively impacted the installation window, "explained the company in a relevant event sent to the CNMV at 11 p.m.
"The impact, only attributable to Onshore activities, has placed the preliminary results of Siemens Gamesa for the first quarter of fiscal year 2020 below market expectations. The performance of the activity in Offshore and Services is in line with the expectations of the Company, "the statement added.
For the first quarter, Siemens Gamesa has anticipated sales of 2,001 million euros and a net loss of 174 million euros, with a net cash position of 175 million euros.
In relation to the full fiscal year 2020 and mainly caused by the exceptional additional costs mentioned above, the Company has reassessed the expectations of the EBIT margin pre PPA (Purchase Price Allocation, translated as ‘allocation of the price paid’ and I&R costs for fiscal year 2020 and now plans to reach a pre-PPP group EBIT margin and R&D costs during fiscal year 2020 between 4.5% and 6%, below the previously communicated guides (5.5% -7%) to market.
Regarding the sales guide for the year 2020 (10,200 -10.6 billion euros of revenue) The Company confirms that the order book covers 98% of the middle part of the guide, 8 percentage points more than at November 5, 2019.
"The 2020 exercise guides reflect a year of transition in terms of profitability, but ensuring growth in income, with concentration of activity at the end of the year. The Company is implementing actions to remediate the path of execution of the project portfolio in Northern Europe and does not foresee any additional impacts in the execution of said portfolio in future quarters, "explains the group.
"Although the financial performance of the first quarter in Onshore has been lower than expected, the long-term vision of the Company remains intact and Siemens Gamesa continues to demonstrate solid commercial performance in the three activities (Onshore, Offshore and Services) that demonstrate the strength of the Company's competitive positioning, "he adds.
Siemens Gamesa will offer the full detail of its results for the first quarter of 2020 in the presentation scheduled for next day February 4, 2020.
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