The Chief Executive Officer of Siemens Energy stated on Friday that he sees limited operational synergies between the company’s underperforming onshore wind unit and its more successful offshore division. This statement highlights continued uncertainty regarding the future of the loss-making unit.
A Tale of Two Cities
Despite the unit’s ongoing losses, which have prompted repeated calls from investors to review or even sell the entire business, Siemens Energy has publicly committed to a turnaround. The company justifies this stance by citing the strong long-term prospects for wind energy generally.
CEO Christian Bruch described the division’s situation as “a tale of two cities.” He emphasized the strength of the offshore segment:
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Offshore Performance: “Offshore, we are market leader. We have excellent products.” He added that if the market continues to thrive, the company is “well positioned also to continue to grow the margins.”
Uncertainty in the Onshore Market
The onshore segment is where the quality issues originated, forcing the company to halt the sale of its newer generation turbines.
Bruch expressed deep uncertainty about the onshore market’s future competition, specifically referencing manufacturers from another global region: “The key question will be: Will the Chinese flood the market or not? I don’t know this yet.” He concluded it is “too early to say… what direction it will go.”
Limited Synergies
When asked about the possibility of breaking up the division effectively selling off the weaker onshore business Bruch suggested the internal value between the two segments might be low. He said, “synergies between the two businesses, I do believe they’re more limited than people believe.”
Separately, Siemens Energy confirmed it anticipates the wind division will finally reach a break-even point in 2026. This optimism follows the company raising its mid-term financial targets and proposing its first dividend in four years, buoyed by strong demand for gas turbines and power grids.
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