Siemens Energy shares fell almost 35 percent in a day and the company slashed its market capitalization by $6.3 billion. The company said its subsidiary is experiencing an increase in component defects in wind turbines and will have to inspect its entire installed fleet.
Siemens has scrapped its profit forecast for 2023 after a review of its wind turbine division revealed deeper-than-expected problems that could cost it more than €1 billion, Reuters reported.
“Following a significant increase in component failures in wind turbines, the board has initiated an extended technical review of Siemens Gamesa’s installed fleet,” Siemens Energy, which is part of the Siemens group, said.
The company’s announcement immediately caused the share price to drop by almost 35%, from €23 to €15.
“This is a disappointment and a serious setback,” Siemens Gamesa CEO Jochen Eickholt told reporters.
Siemens chief financial officer Maria Ferraro told analysts that the biggest losses would occur in the next five years.
“Given the history and nature of wind power, the profit warning was not a complete surprise, but what surprised us was the scale,” analysts at investment bank JPMorgan noted.
As Reuters notes, the discovery of faulty components at Siemens Gamesa in January has already resulted in costs of almost half a billion euros.
Jochen Eickholt said the problems with the wind turbines were caused by rotor blades and bearings. However, it cannot be ruled out that design problems also played a role.
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