Siemens Energy sees limited synergies between its struggling onshore and better-performing offshore wind units, its CEO said on Friday, reflecting ongoing uncertainty over the future of the loss-making division.
Siemens Gamesa, Siemens Energy's wind division that produces both offshore and onshore turbines, is still recovering from a quality crisis two years ago, causing the division to post an operating loss late Thursday of €1.36 billion ($1.59 billion) in the fiscal year that ended in September.
Siemens Energy, which also on Thursday raised its mid-term targets and proposed its first dividend in four years on strong demand for gas turbines and power grids, confirmed that it expects Siemens Gamesa to break even in 2026.
The unit’s ongoing losses have repeatedly driven calls by investors to review or even sell the business, but Siemens Energy has so far committed to turning the business around, touting the long-term prospects for wind energy overall.
"Keep in mind it's a tale of two cities," Siemens Energy CEO Christian Bruch told Reuters. "Offshore, we are market leader. We have excellent products. If the market continues to thrive... I think we are well positioned also to continue to grow the margins."
For onshore wind, where the quality issues caused it to halt the sale of its newer generation turbines, Bruch said, "the key question will be: Will the Chinese flood the market or not? I don't know this yet. So I think it's too early to say...what direction it will go."
Asked about a potential breakup of the division to rid itself of the weaker onshore business, Bruch said, "synergies between the two businesses, I do believe they're more limited than people believe."
(Reporting by Christoph Steitz and Max Schwarz Editing by Miranda Murray, Elaine Hardcastle)
