BERLIN - Siemens Energy's stock saw a 3.8% increase Today after the company received substantial financial backing from the German government and private banks. This move comes as a response to the company's burgeoning order backlog, which has reached a staggering EUR 112 billion. The German government has stepped in with EUR 7.5 billion in state guarantees, part of a larger EUR 15 billion support package aimed at bolstering Siemens Energy's financial position.
Christian Bruch, CEO of Siemens Energy, highlighted the company's rapid order growth, which has outpaced revenue, underscoring the need for external support for long-term projects. The state guarantees are designed to be temporary, with expectations set for a duration of less than two years. In light of this assistance, Siemens Energy will halt dividends and management bonuses until it achieves net profit.
The company recently reported a loss in fiscal year Q4, attributing much of its struggles to its wind turbine subsidiary, Siemens Gamesa. The division has been wrestling with quality control issues, rising product costs, and difficulties in scaling up offshore operations. Siemens Energy is now concentrating on strengthening its balance sheet and working toward generating net profits, with dividends to remain suspended during this period of strategic financial management.
InvestingPro Insights
InvestingPro's real-time data and tips provide valuable insights into Siemens Energy's current financial situation. The company's market capitalization stands at a significant 8829.93M USD, and the revenue growth over the last twelve months as of Q3 2023 is 13.42%. This aligns with the company's reported rapid order growth. However, the company has been operating with a poor return on assets, as indicated by a -6.84% return on assets for the same period. This may be a result of the difficulties faced by its wind turbine subsidiary, Siemens Gamesa.
InvestingPro Tips suggest that Siemens Energy's stock has seen significant return over the last week, which is in line with the 3.8% increase reported in the article. Despite the recent uptick, the stock has fallen significantly over the last three months. This could be attributed to the reported loss in fiscal year Q4 and the challenges faced by Siemens Gamesa. The company is also noted as a prominent player in the Electrical Equipment industry, which may have contributed to the substantial financial backing it received.
For more in-depth analysis and additional tips, consider exploring InvestingPro's comprehensive product offerings. With over 18 additional tips available for Siemens Energy, investors can gain a more nuanced understanding of the company's performance and potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.