Siemens Gamesa Ramping Up Offshore Wind Production Capacity, Expects to Break Even by FY 26

Business & Finance

November 21, 2023, by Adnan Memija

Siemens Gamesa is ramping up production capacity at existing factories to meet customer demand and work through the order backlog as the company expects to achieve break even by fiscal year 2026.

At its third Capital Market Day in Hamburg, Germany, Siemens Energy presented a strategic outlook to analysts and investors.

The Executive Board outlined a clear path to create shareholder value along three priorities: Deliver on profitable growth, fix the wind business, and maintain a solid financial foundation.

According to Siemens Energy, strengthening operational excellence through plant-specific initiatives, commercial selectivity, and implementing cost-saving measures, will increase profitability.

Now, Siemens Gamesa expects to achieve break even by fiscal year 2026 followed by profitable growth.

“The turnaround of Siemens Gamesa remains our highest priority and we now have a defined path and action plan to reach break-even for the wind business in fiscal year 2026 and to return to profitability thereafter,” said Christian Bruch, President and CEO of Siemens Energy.

At the beginning of this year, Siemens Gamesa Renewable Energy posted a significant net loss for its Q1 2023, mainly due to specific components’s failure rates, and its financial debt totaled EUR 1.9 billion as of 31 December 2022.

However, looking long-term, the company said in February that it sees a light at the end of the tunnel, driven by, among other things, the integration into Siemens Energy, as well as the Inflation Reduction Act (IRA) in the US, and the EU’s REPowerEU.

Since then, Siemens Gamesa minority shareholders approved in June a capital reduction for the remaining 2.21 per cent of shares not held by Siemens Energy in the Extraordinary General Meeting of Shareholders, paving the way for a full integration of both companies.

When it comes to the US offshore wind market, Siemens Gamesa recently announced that it discontinued its plans to build and operate an offshore wind turbine blade manufacturing plant in Virginia.

The facility, which covered more than 80 acres, was expected to support approximately 300 jobs once fully operational.