Siemens Energy expects limited US tariff hit, raises prices for new orders

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -Power equipment maker Siemens Energy said on Thursday it expected a limited hit to profits from U.S. tariffs, citing price increases for new orders as well as efforts to seek alternative suppliers for parts it needs to import.

Factoring in these mitigation measures, the company said it expected "up to a high double-digit million euro" hit to profits in the second half of the current fiscal year, quantifying for the first time the impact of the broad U.S. import tariffs.

The company's stock was indicated to open 2.2% above its last close.

The group fleshed out steps to cushion the impact of duties, including measures to increasingly localise its supply chain and better leverage its U.S. "footprint for production, processing and repair of key components".

The United States accounts for around a fifth of Siemens Energy's sales and is home to 12% of the group's staff as well as eight of its production locations that make everything from wind and gas turbines to power grid equipment.

Last month, peer GE Vernova said it expected a cost impact of $300 million to $400 million in the current fiscal year due to the tariffs, which have started to disrupt established global supply chains.

Meanwhile, Siemens Energy said its net profit nearly rose fivefold to 501 million euros ($566 million) in the second quarter ended March 31, beating the average estimate of 217 million euros in an LSEG poll of banks and brokerages.

The group's preliminary results released last month for the January-March period marked its best quarter since it was spun off from former parent Siemens AG in 2020.

($1 = 0.8846 euros)

(Reporting by Christoph Steitz; Editing by Chizu Nomiyama, Ludwig Burger and Sumana Nandy)