Siemens Gamesa reports € 56 million COVID-19 hit in Q2 2020
- Business & Finance
The ongoing COVID-19 pandemic affected Siemens Gamesa’s operations and commercial activity, leaving a € 56 million mark on the company’s profitability in its second quarter of the fiscal year 2020 (January–March).
Siemens Gamesa adjusted its operations to employ COVID-19 health and safety measures, and applied new solutions to ensure operations continue. The latter included re-routing certain supply chains, optimising remote monitoring to guarantee service operations and, in offshore wind, extending periods for maintenance teams working at sea.
Order intake between January and March amounted to € 2.2 billion, a Year-on-Year (YoY) decrease of 11%. The company attributes this to “the normal volatility of the Offshore market” and the impact COVID-19 had on the signing of contracts for onshore wind projects.
Looking at the last twelve months, Siemens Gamesa’s offshore wind order intake increased by 56% YoY to 2,879 MW.
The company’s second quarter of fiscal year 2020 saw two preferred supplier agreements for the 11 MW offshore wind turbine signed with Ørsted for the 900 MW Borkum Riffgrund 3 and 242 MW Gode Wind 3 offshore wind farms.
Siemens Gamesa states that the two contracts raised its conditional pipeline to 10.7 GW. Firm orders Siemens Gamesa has in the order book stand at 5.5 GW.
When it comes to the pandemic’s effect, it hit the company’s revenues and returns, with revenues falling by 8% between January and March, to € 2.2 billion due to lower sales of wind turbine generators. Revenues in the first half (September 2019–March 2020) amounted to € 4.2 billion, a decrease of 9.6% YoY.
The decline in profitability includes the € 56 million direct impact of the COVID-19 crisis, equivalent to 2.5% of revenues in the quarter.
For the second quarter, Siemens Gamesa posted an EBIT pre PPA and before integration and restructuring costs of € 33 million, with an EBIT margin pre PPA and before integration and restructuring costs of 1.5%.
In the first half of its fiscal year, Siemens Gamesa reported an EBIT margin pre PPA and before integration and restructuring costs of € -103 million, equivalent to a margin of -2.5% of revenues. In this context, the company booked losses of € 165 million in the second quarter and € 339 million in the first half, Siemens Gamesa informs.