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Siemens profit halves in late 2018 slowdown
BERLIN, Jan 30, 2019 (BSS/AFP) – German industrial giant Siemens on
Wednesday reported slumping profits in the first quarter of its 2018-19
financial year, although order books were well filled.
The group booked a net profit of 1.1 billion euros ($1.25 billion) between
October and December, a fall of 49 percent year-on-year.
Much of the drop reflected the comparison with the year-earlier period
which saw one-off windfalls from Siemens selling off shares in former
lighting subsidiary Osram and from tax cuts in the United States.
Revenues at the group were steady, gaining one percent year-on-year to
20.1 billion euros, slightly lower than forecast by analysts surveyed by
Factset.
Meanwhile operating, or underlying profit as measured by EBITA fell six
percent, to 2.0 billion.
“There is still much to do before we achieve industry-leading margins in
all our businesses,” said Joe Kaeser, chief executive of the group that
builds products ranging from gas turbines to medical devices.
Siemens’ troubled energy division continued to “disappoint”, Kaeser said,
even after a massive restructuring last year in which it shed 7,000 jobs.
The Power and Gas unit booked revenues down nine percent year-on-year and
halved its operating profit to 119 million euros.
But orders grew for Siemens Mobility, the rail division bosses hope to
merge with France’s Alstom despite resistance from the European Commission.
One major booking was a 1.6-billion-euro contract to supply new trains for
the London Underground.
Profits at the unit were steady at 236 million euros, following a strong
July to September quarter.
Kaeser, freshly returned from the World Economic Forum in Davos,
highlighted international uncertainty potentially weighing on Siemens in
2019.
But the group is still forecasting “moderate growth” in revenue in its
2018-19 financial year to September, after currency effects and changes to
its structure following the mooted Alstom rail merger are excluded.
As it heads into its annual general meeting later Wednesday, Siemens has
yet to announce how large a dividend it will pay to shareholders following
its profitability struggles at the start of the year.
BSS/AFP/HR/1335