Munich (Reuters) - Despite continuing losses at its Spanish wind power subsidiary Gamesa, energy technology group Siemens Energy has achieved a turnaround in profits.

In the first quarter of 2023/24 (October to December), Siemens Energy reported an operating profit of 208 million euros, as announced on Tuesday evening. A year earlier, the company, which was spun off from Siemens, had generated a loss of 282 million euros, and analysts had also expected the past quarter to be in the red. Sales soared by 15 percent to 7.6 billion euros, while incoming orders rose by as much as 24 percent to 15.4 billion euros. Siemens Energy experienced a boom in the electricity and gas grid business in particular, with sales and order intake rising by a third.

However, the Managing Board headed by Christian Bruch does not yet want to increase the profit and sales forecast for the fiscal year (as of the end of September). The market environment remains positive. However, project delays between individual quarters are not unusual in plant engineering. "Siemens Energy is therefore sticking to its forecast for the current fiscal year," the statement said. Adjusted for currency and portfolio effects, revenue is expected to increase by three to seven percent in 2023/24; in terms of the return on sales before special items, Siemens Energy still considers a loss of minus two to plus one percent to be possible. In the first quarter, the margin was 2.7 percent.

The figures were met with relief on the stock market: the heavily battered share was the biggest gainer on the DAX on Wednesday, rising ten percent to 13.70 euros. J.P. Morgan analysts wrote that sales and incoming orders had exceeded expectations and that "a good start to the year increases confidence in the forecast." The order intake was three billion euros above the expert estimates collected by Siemens Energy itself, sales were almost 300 million euros higher and earnings were also a good 300 million euros better than expected.

Below the line, Siemens Energy even posted a profit of 1.88 (previous year: minus 0.38) billion euros. This is mainly due to the sale of a large part of the shares in the joint Indian subsidiary to the former parent company Siemens, which brought in 2.1 billion euros. Siemens had used this to financially support the former subsidiary in the struggle for guarantees for major projects. With the sale of the high-voltage components division Trench Electric to the financial investor Triton, Siemens Energy realized a mid three-digit million euro sum.

At the same time, the problem child Siemens Gamesa is not getting out of the red. However, the loss before special effects was reduced to 426 (minus 759) million euros and was lower than expected by analysts. Turnover rose by five percent to 2.04 billion euros. The entire industry is suffering from rising material costs and a price war, while Siemens Gamesa is also suffering from quality defects in onshore wind turbines and start-up difficulties with offshore wind turbines. Siemens Energy expects Gamesa to make a loss of around two billion euros for the year as a whole. A cost-cutting program is to reduce costs by 400 million euros.

(Report by Alexander Hübner, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)