Siemens Energy Warns of Deeper Net Loss Over Russia Restructuring

Siemens Energy's site is seen on the day of German Chancellor OIaf Scholz's visit, during which he saw a gas turbine meant to be transported to the compressor station of the Nord Stream 1 gas pipeline in Russia, in Muelheim an der Ruhr, Germany, August 3, 2022. REUTERS/Wolfgang Rattay

Siemens Energy, which supplies equipment to the power industry, on Monday warned of a deeper than previously expected net loss in 2022, on a charge of around 200 million euros ($204 million) due to the restructuring of its business in Russia.

The company, which is maintaining the turbines of the Nord Stream 1 Portovaya compressor station, said its net loss would exceed the 560 million euro loss in 2021 by the charge, which is reported as a special item.

Siemens Energy, which was spun off from Siemens in 2022 and owns a majority in struggling wind turbine maker Siemens Gamesa, previously expected its 2022 net loss to be on par with last year.

The group earlier this year said it would stop all new business in Russia, adding that sales there account for a low single-digit percentage share of its total sales of 28.48 billion euros.

Siemens Energy also pointed to ongoing weakness at Siemens Gamesa as a drag on quarterly results, ahead of a planned 4.05 billion euro cash bid for the remaining 33% it does not already own in the Spanish-listed firm.

"We expect the new management at Siemens Gamesa now to implement a rigorous turnaround plan," Siemens Energy Chief Executive Christian Bruch said, a week after sources told Reuters that the company was weighing 2,500 job cuts.

($1 = 0.9822 euros)