UPDATE 1-Siemens Gamesa sees 2019 margins squeezed by commodity prices, emerging markets

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UPDATE 1-Siemens Gamesa sees 2019 margins squeezed by commodity prices, emerging markets

MADRID, Nov 6 (Reuters) – Wind turbine maker Siemens Gamesa said on Tuesday commodity prices and emerging market volatility would hit profit margins in 2019 as it reported annual falls in revenue and core earnings.

Formed by the merger of Spain’s Gamesa with the wind power business of Siemens, Siemens Gamesa said full-year revenue came in at 9.12 billion euros ($10.4 billion), down 17 percent from a year ago.

“The second half of the year is projected to be much stronger than the first,” the company said in a statement.

In the fourth quarter, order intake for the onshore business leapt 21 percent year-on-year to 2,631 megawatts (MW), driven by the United States, followed by India and Europe.

The company, which counts Spain’s Iberdrola as a major shareholder, also signed its first contract in Russia.

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A steep drop in selling prices for turbines throughout the year stabilised in the fourth quarter to balance out at an average 9 percent fall for the full year.

Strong demand boosted order backlog to 22.8 billion euros, a 10 percent increase on September 2017.

Siemens Gamesa competes with Danish rival Vestas for the top spot in the world’s wind turbine market.

 Sales came in at the lower end of its 9-9.6 billion euro target range while its closely-watched earnings before interest and tax (EBIT) margin rose to 7.6 percent.

Revenue started growing again in the fourth quarter and should turn positive year-on-year in 2019, Siemens Gamesa said, but it forecast little change in the EBIT margin, setting guidance of between 7 and 8.5 percent.

 News Source: Reuters
By | 2018-11-06T08:55:03+00:00 November 6th, 2018|News|Comments Off on UPDATE 1-Siemens Gamesa sees 2019 margins squeezed by commodity prices, emerging markets
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