Siemens Gamesa sets out move to “reset” by replacing CEO By Reuters

By Isla Binnie

MADRID (Reuters) -Siemens Gamesa confirmed a gloomy outlook for full-year profits on Thursday, a day after the world’s largest maker of offshore turbines named a new chief executive to try to revive its fortunes.

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

The company confirmed on Thursday that its most optimistic prediction was for a paper-thin core profit margin of 1%, but warned this metric could be as low as negative 4%.

Profits at wind turbine makers including Danish market leader Vestas have been squeezed by rising costs of loistics and for raw materials such as steel, prompting them to raise prices. Siemens Gamesa’s woes have been compounded by delays rolling out a new onshore turbine.

Jochen Eickholt, managing director of German parent Siemens Energy will take over as CEO on March 1, replacing Andreas Nauen, who had been in the job for less than two years.

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

“I’m sad so often I had to present disappointments here.”

Madrid-listed shares in Siemens Gamesa rose as much as 3% in early trading but fell back into negative territory by 0907 GMT. Siemens Energy’s shares were up around 0.7% in Frankfurt.

Siemens Energy has grown increasingly frustrated by Siemens Gamesa’s losses.

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

Nauen said wind turbine makers used to shoulder the cost of shipping large turbine parts, but the new era of high prices had prompted Siemens Gamesa to pass on logistics costs to customers.

“When we have large overseas and sea 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 that but only at cost plus a certain margin,” he said.

A process to raise cash by selling off the company’s southern European wind farm development business was “going really well”, Nauen said.

($1 = 0.8852 euros)