ENR Siemens Energy AG

   By Giulia Petroni 
 

Some wind-energy stocks in Europe trade lower Friday after Siemens Energy scrapped its fiscal 2023 profit guidance amid mounting problems at its wind turbine unit.

After a technical review of subsidiary Siemens Gamesa's installed fleet and product designs, the German energy company said it expects significantly higher costs, possibly more than EUR1 billion, in order to reach targeted product quality of certain onshore platforms.

Shares in Danish wind-turbine maker Vestas are down 5.1%, while Orsted is down 1.1%. Germany's Nordex trades 2.2% lower.

Looking at Orsted's exposure, Citi's Jenny Ping and Rory Graham-Watson said it is unclear what the longer term implications could be. "At first glance, this appears to be a company specific issue as opposed to an endemic industry problem," the analysts said in a note. "However the challenges to ramp up offshore platforms could lead to potential delays in future deliveries."

Siemens Energy's warning could instead be an industry wake-up call as it is reasonably likely that other win-turbine manufacturers face similar component-performance issues, Bernstein analysts said. Yet, "wind operators need to share in the development of a commercially immature machinery market, to keep their supply chain strong. It seems imbalanced that the full risk of new machinery development sits with the OEMs [original equipment manufacturers]," they said in a research note.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

June 23, 2023 06:13 ET (10:13 GMT)

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