A temporary downturn in the Indian wind market is at the heart of a 7% decrease in Siemens Gamesa’s quarterly revenues, but the newly minted company expects to speed up its integration process of both pre-merger companies.
Siemens Gamesa, the resulting company of a successful merger completed earlier this year by wind energy powerhouses Gamesa and Siemens (its wind power business), published its latest quarterly earnings report (for the 3rd quarter) this week. The company’s financial year runs to the end of September. Global revenues for Siemens Gamesa were down 7% to €2,693 million in the third quarter, due apparently to a temporary downturn in the Indian market. Sales were therefore 1,950 MW, down 25%, and the company’s EBIT was €211 million, down 21%. However, the company’s Operations & Maintenance (O&M) division saw its revenue expand by 8% to €300 million.
Specifically, the wind energy market in India practically shut down as it anticipated a revamp of the country’s auction system, which should normalise by the first quarter of fiscal year 2018 (which would equate to October–December, or the 4th quarter of the calendar year). If India’s impact on Siemens Gamesa’s financials were taken away, the company’s revenues would actually have been up 1.6% and there would have been strong growth of 8.6% in its underlying EBIT margin.
While revenue and other financial indicators were down, the company nevertheless remains content with its performance in the 3rd quarter, its first quarter as a fully merged company. Specifically, the months of April to June saw Siemens Gamesa speed up the integration process of both pre-merger companies, and the company now expects to see its synergies hit a minimum of €230 million, and a year earlier than originally predicted.
“We are highly satisfied with the progress to date in integrating the two companies,” said Markus Tacke, CEO of Siemens Gamesa. “Things are progressing at a rapid rate: our company is ready to compete and lead in a growing and challenging market.”