Siemens’ Energy Division Profit Down 54 Pct

German conglomerate Siemens reported the second-quarter profit of €255 million for its energy business, which is 54% lower than in the same period last year.

Some of the factors that contributed to this are charges of €48 million, caused by a malfunction of bearings in some onshore wind turbines, and €287 million charges for two HVDC projects in Canada.

The Wind Power Division reported a loss of €50 million, mostly as a result of the bearings issue, but also due to lower profit that was held back by “unfavorable business mix that included an unusually low contribution from the higher-margin offshore business.“

Power Transmission recorded a loss of €297 million, compared to a loss of €49 million from the previous year, mostly due to Canadian projects, but also due to €23 million charges for offshore wind farm grid connection in Germany.

The company said: “ We expect our markets to remain challenging in fiscal 2014. Our short-cycle businesses are not anticipating a sustainable recovery until late in the fiscal year.“

Joe Kaeser, President and Chief Executive Officer of Siemens AG added: “The second quarter showed that we still have a lot to do to improve our operating performance. Nevertheless we are on course to reach our targets for the fiscal year.”