Siemens Energy shares plummet after €1bn cost of component failures at Siemens Gamesa revealed

Siemens Energy abandoned its 2023 profits outlook on Thursday night and disclosed that the expected bill to address the issues it had identified at the troubled turbine firm was likely to be over €1 billion. 

The European firm’s shares were down 35.63% as of 4.33pm on Friday, hours after Jochen Eickholt, CEO of Siemens Gamesa, told journalists this morning that problems with the company’s turbine blades and bearings represented a “bitter setback”. Eickholt said the cost of addressing the issues at the firm would be spread over several years.  

Eickholt described how wind farm managers at sites employing Siemens Gamesa turbines had discovered “unusual vibration behaviour” with some turbine components, reporting them back to the company. 

The turbine failures could reportedly impact between 15-30% of the company’s entire installed wind fleet at present, which amounts to over 130GW worldwide. 

The turbine firm’s CEO said the problens were “worse than I would have thought possible”.

“The quality problems go well beyond what had been known hitherto, particularly in the onshore area. The failure rates of components affecting certain components look just like previous quality issues, but they also are different because they are new forms of failures,” Eickholt said. 

While Siemens Gamesa previously reviewed component problems at the company, on Friday the company confirmed that another investigation, with a new leadership team, would now be launched to provide a “completely new and fresh look at the entire situation”.