Siemens Gamesa in $629 million sale of south European assets to SSE
On the same day, preliminary results from the second quarter of SGRE’s first quarter were published. The latter reported revenues of about 2.2 billion euro and operating losses of approximately 304 million euros.
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Siemens Gamesa Renewable Energy has agreed to sell assets in southern Europe to Scotland-headquartered energy firm SSEThe deal was for approximately 580 million Euros (around $628 Million), and around 40 employees of the turbine manufacturer will be moving to SSE.
SGRE released a statement Tuesday saying that the sale includes “a pipeline for onshore wind project in Greece, Spain and France”.
The capacity of these projects — which Siemens Gamesa said were “in various stages of development” — comes to 3.9 gigawatts. It is possible to create co-located photovoltaic plants with up to 1GW of capacity.
Jochen Eickholt is the CEO at Siemens Gamesa. He said that the announcement showed his company’s ability to maximize its assets and optimize value.
Stephen Wheeler, SSE Renewables’ managing director, stated that this project portfolio would be “a great springboard to our expansion plans for Europe across wind and solar, batteries, hydrogen, and other energy sources.”
Laura Hoy (equity analyst) comments on the sale Hargreaves Lansdown, said: “SSE’s doubling down on its renewables efforts, and today’s announcement of a €580m bet on Southern European wind projects is evidence of management’s conviction.”
“On the surface this looks like the right play — transitioning toward cleaner energy is the clear direction of travel and the group’s seen output improve steadily over the past few months.”
She added that “having more sails does not guarantee smoother waters.”
“The performance of SSE’s Renewables Division has been disappointing so far in the year. Even though things seem to be improving, it is still below target.”
“Pouring money into a yet unproven part of the business is a risky move to be sure — but at present it seems like the only way forward if growth is eventually on the menu.”
On the same day that the latter was released, details of the agreement were made between SSE und SGRE preliminary results for the second quarterReporting revenues of about 2.2 billion euros, and an operating loss approximately 304 millions euros.
Company stated its performance was adversely affected by “product and execution related issues.” They added that the previous guidance from 2022 had “ceased to be valid and is currently under review.”
Siemens Gamesa has had a difficult period. Siemens Gamesa stated that revenue in 2022 will shrink between 9% to 2%. It previously had hoped for a decrease of between 7 and 2%.
The operating profit margin (or EBIT margin prior to purchase price allocation, integration and restructuring costs) was also modified by the company. It had previously forecast growth of 1% and 4.4%.
On Tuesday, the company said it would “continue to work to achieve revenue within our year-on-year revenue growth range of -9% and -2%, and towards the low end of our previously communicated EBIT pre PPA and I&R costs margin guidance range of -4%, including for both now the positive impact of the Asset Disposal.” SSE recently announced that the Asset Disposal would be implemented.
SSE stated that its full-year 2002/22 adjusted earnings per shares would be in the range of 92 to97 pence as opposed to prior guidance of less than 90 pence.
Siemens EnergySiemens Gamesa has a 67% share of.
Other headwinds were also mentioned by the company. It stated that “Because the war against Ukraine, and the sanctions imposed upon Russia, the operating environment Siemens Energy has been more difficult” and confirmed it “complys with all sanctions” and had stopped new Russian business.
Siemens Energy claimed that the war had caused it to “start to notice an impact on revenues and profitability”, and also experienced an “aggravation of existing supply chains constraints.”
It stated that “Due the dynamic nature of the sanctions regime management cannot fully assess the potential effect for the remainder fiscal year at the current point in time, and can therefore not exclude further negative effects revenue and profitability.”
Siemens Energy shares fell by 1.5% Wednesday, midday London. Siemens Gamesa’s shares increased by 5.4% following a lower opening. The deal between SGRE & SSE should be completed by September end if all goes according to plan.