A 2.37-megawatt Siemens power-generating wind turbine is shown at the Ocotillo Wind Energy Facility in California, May 29, 2020.
Bing Guan | Reuters
Shares of Siemens Energy rose 12% on Wednesday after the German renewable energy company raised its forecast for this year and announced that the CEO of its struggling wind turbine unit would be replaced amid “comprehensive restructuring measures.”
Siemens Gamesa's Jochen Eckholt has informed the board that he will step down from his position as CEO by mutual agreement on July 31, and will be succeeded by Vinod Philipp, it said in a statement.
“In a very difficult situation at Siemens Gamesa, Jochen laid the central foundations for the urgently needed reorganization and fresh start within Siemens Energy. It is fair to emphasize that the causes of the quality problems did not fall within his period as CEO.” Siemens Energy CEO Christian Brock said In the current situation.
She said Gamesa had initiated comprehensive restructuring measures and “long-term strategic development steps” in order to boost operating margins.
Strong demand for power grid equipment amid the company's “success” in stabilizing its wind energy business led Siemens on Wednesday to raise its forecast for this year.
For the full year, the company now expects comparable revenue growth of between 10% and 12% and a profit margin before special items of between negative 1% and positive 1%. It previously expected comparable revenue growth of between 3% and 7% and a profit margin before special items of between negative 2% and positive 1%.
Siemens Energy has had a difficult 2023. Problems with manufacturing defects at Gamesa forced the parent company to lose 4.6 billion euros ($4.94 billion). For the fiscal year. An investigation has been launched into quality issues in the wind turbine division.
In June, during a particularly turbulent period for the stock, Siemens Energy scrapped its earnings forecast and warned that costly failures at Gamesa could continue for years.
The wind power industry has expanded rapidly over the past two decades, bringing costs down to rival – and sometimes undercutting – those of fossil fuels, while boosting efficiency with ever-larger turbines and reducing reliance on government subsidies. But problems last year have investors concerned that Gamesa's problems may be a symptom of a broader problem facing the industry.
Meanwhile, on Wednesday, Siemens Energy reported net income of €108 million For the fourth quarter, it raised its expectations for “stronger growth and positive monetary development.”
— CNBC's Elliott Smith contributed to this article.
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