Late Thursday, the organization declared that a survey of problems at branch Siemens Gamesa had uncovered a "huge increment in disappointment rates of wind turbine segments". Consequently, the Siemens Gamesa board has set in motion an "all-encompassing specialized review" that will result in "intensely higher costs" than already envisioned, conjectured to be more than 1 billion euros ($1.09 billion).
Shares of Siemens Energy nosedived on Friday following the firm's announcement that its previously released forecast for profit had been scrapped. Furthermore, wary of costly issues at its wind turbine unit that could last for years, the company's parent, Siemens, revealed that a review of its Siemens Gamesa subsidiary had uncovered a sizable uptick in component failure rates. This prompted Siemens Gamesa to launch an extended technical assessment in an attempt to enhance product quality, which is estimated to cost in excess of €1 billion. Siemens Energy noted that it was too soon to precisely determine the potential financial burden and to measure the effect of its assumptions on its business plans, leading it to withdraw its profit guidance for FY2023. Siemens Gamesa has been a continuous problem for the parent firm since it was fully acquired at the end of last year.
Christian Bruch, CEO of Siemens Energy, expressed on a call Friday his surprise at the magnitude of quality issues at Siemens Gamesa, according to Reuters. Nicholas Green, head of European capital goods at Alliance Bernstein, stated that Siemens Energy should be able to rebound from their recent fall, however, the market had been startled by the immense problems. He pointed out that the company's €17 billion service order book provides service for wind farms and turbines for up to ten years, necessitating a large financial liability for any component failures. The root cause of the failures is estimated to affect between 15%-30% of Siemens' installed fleet, however, Green noted that the total implications still remain unclear. He concluded that a more detailed report for the beginning of August should clarify the cost and obligations of the company.
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