Siemens Energy Reports Record Q2 Profit Margin, Raises Outlook
By Christoph Steitz
FRANKFURT (Reuters) -Siemens Energy on Wednesday posted its best profit margin since being spun off from Siemens nearly five years ago, citing a strong performance in all of its business areas which provide equipment and services to the global power industry.
As a result of the forecast-beating second-quarter performance, Siemens Energy raised its outlook for the current fiscal year and now expects a profit margin before special items of 4-6% in 2025, up from 3-5% previously.
The company, which makes and services gas and wind turbines, power grid infrastructure and electrolysers among other equipment, is benefiting from surging global demand for power, a trend partly driven by data centres needed for AI technology.
Sales are expected to rise by 13-15%, up from 8-10%, while free cash flow pre-tax is seen at around 4 billion euros ($4.55 billion), while the group had previously forecast more than 1 billion.
Citing a "positive business development" without providing more context, Siemens Energy's second-quarter profit before special items increased more than five-fold to 906 million euros, making for a margin of 9.1%, beating the 6.2% consensus.
This is the highest margin since it was spun off as a separately listed entity from former parent Siemens AG in September 2020.
The second-quarter loss before special items at its struggling wind turbine unit Siemens Gamesa narrowed to 249 million euros, also beating the 342 million euros consensus figure.
Frankfurt-listed shares in the company, which is scheduled to release final second quarter results on May 8, rose 2.2% following the news.
Siemens Energy in February warned that it expected a hit from U.S. tariffs despite its substantial local footprint, adding it was too early to quantify the impact and that it would pass on price increases to customers.
($1 = 0.8787 euros)
(Reporting by Christoph Steitz; Editing by Kirsten Donovan and Deepa Babington)
