Siemens Gamesa undertakes ‘reset’ by replacing CEO

A wind turbine model with the Siemens Gamesa logo is displayed outside the annual general meeting of shareholders in Zamudio, Spain, June 20, 2017. REUTERS/Vincent West/

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MADRID, Feb 3 (Reuters) – Siemens Gamesa (SGREN.MC) confirmed a gloomy full-year profit outlook on Thursday, a day after the world’s largest offshore turbine maker appointed a new chief executive. in an attempt to revive his fortune.

After a series of losses blamed on supply chain disruptions, rising raw material costs and problems at its onshore division, Chairman Miguel Angel Lopez says the board has appointed a new CEO in as part of a “reset”.

The company confirmed on Thursday that its most optimistic forecast was for a base profit margin of 1%, but warned that this measure could be as low as negative 4%.

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Profits for wind turbine manufacturers, including Danish market leader Vestas (VWS.CO), have been squeezed by rising costs of legislation and raw materials such as steel, prompting them to raise prices price. Siemens Gamesa’s woes have been compounded by delays in rolling out a new onshore turbine.

Jochen Eickholt, managing director of German parent company Siemens Energy (ENR1n.DE) will take over as CEO on March 1, replacing Andreas Nauen, who has been in the role for less than two years. Read more

“The rationale was obvious…not that I like it but I completely understand it,” Nauen told analysts on a conference call.

“I am so often sad that I had to present disappointments here.”

Madrid-listed shares of Siemens Gamesa rose 3% in early trading, but fell back into negative territory at 0907 GMT. Shares of Siemens Energy rose about 0.7% in Frankfurt.

Siemens Energy is increasingly frustrated with Siemens Gamesa’s losses.

People familiar with the matter told Reuters that the German company had stepped up its efforts to gain more control, including exploring the possibility of acquiring the 33% stake in Siemens Gamesa that it does not already own. Read more

Nauen said wind turbine manufacturers used to bear the shipping costs for large wind turbine parts, but the new era of high prices has prompted Siemens Gamesa to pass on logistics costs to customers.

“When we have major overseas and maritime transport … at the moment (it is) very unpredictable how it will be in one or two years, we say we will gladly take care of it, but only at cost plus a certain margin,” he said.

A process to raise funds by selling the company’s southern European wind farm development business “was going very well,” Nauen said. Read more

($1 = 0.8852 euros)

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Reporting by Isla Binnie, editing by Jason Neely and Kim Coghill

Our standards: The Thomson Reuters Trust Principles.

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