Siemens Energy books $2.4 billion wind turbine hit in Q3 2023 results

Siemens Energy CEO Christian Bruch said Monday that the company needs to slow down its rollout of new products after booking 2.2 billion euros ($2.4 billion) in costs due to quality issues at its wind turbine unit.

In June, Siemens Energy scrapped its profit forecast and warned that costly failures at wind turbine subsidiary Siemens Gamesa could drag on for years, sending shares tumbling.

The Siemens Gamesa board is currently undergoing a review of the quality issues, which some analysts have suggested could turn out to be pervasive across the industry.

“The quality problems really result from the past, but I think we have too fast rolled out platforms into the market,” Bruch told CNBC’s “Squawk Box Europe” on Monday.

“That is not a cost issue per se, that is really a quality issue in terms of going too fast with new products into the market. The other thing is obviously now stabilizing the business in terms of ramping up new factories.”

Though well below worst-case estimates, Siemens Energy said the 2.2 billion euro hit will push its net loss for the year to around 4.5 billion euros —significantly worse than previously expected.

On a positive note, Siemens Energy — born from the spinoff of the former gas and power division of German conglomerate Siemens — posted strong growth in orders and revenue, and logged a record order backlog of 109 billion euros in its third-quarter earnings report Monday.

“I still believe the market itself, and you see that with the 7.5 billion orders we’ve got in the wind business this quarter, is a very interesting growth market,” Bruch added.

“However, obviously, it has to be set up in a way that you can run a profitable business, and obviously making sure that we slow down this fast rollout of new products is a key element in this.”