Siemens Energy fall on looming share sale as wind woes persist
By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) - Shares in Siemens Energy fell to their lowest level in four weeks on Tuesday, hit by a pending potential share issue the company has flagged to help fund its planned takeover of troubled wind division Siemens Gamesa.
The maker of onshore and offshore wind turbines has weighed on Siemens Energy, triggering several profit warnings over quality issues which the German parent says can more effectively be tackled via a full integration.
To help fund the bid, Siemens Energy plans to raise a maximum of 1.5 billion euros ($1.6 billion) "as quickly as possible", Chief Financial Office Maria Ferraro said as the group presented first-quarter results that reflected ongoing issues at the unit.
Quality issues at Siemens Gamesa's installed fleet of turbines caused Siemens Energy's net loss to more than double to 598 million euros in the October-December quarter, compared with a loss of 246 million euros a year earlier.
"This has been a hard blow for us," CEO Christian Bruch told journalists, referring to the 472 million euro charge Siemens Gamesa unveiled last month due to faulty components that led to higher warranty and service costs.
Shares in Siemens Energy, which has secured 97.59% of Siemens Gamesa shares as of Feb. 6, fell 4% on Germany's blue-chip index.
Siemens Energy will ask shareholders at its annual general meeting, also taking place on Tuesday, to allow the issuing of new shares in the future, which sell-side analysts at Deutsche Bank said will likely be used to raise the needed equity for the Siemens Gamesa purchase.
The group's order backlog provided a positive note, hitting a record high 98.8 billion euros as of the end of December, driven by its grid technology division which recorded a major win last month.
The group, which was spun off from Siemens in 2020, in presentation slides said the backlog would translate into 22 billion euros of revenue in 2023, 21 billion in 2024 and 55 billion in 2025.
Service contracts account for more than half of the backlog.
($1 = 0.9334 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Additional reporting by Stefanie Geiger; editing by Kylie MacLellan and Jason Neely)
