Siemens Energy, the world's leading offshore turbine manufacturer, is at risk of order cancellations and delays unless it secures guarantees worth approximately 15 billion euros ($15.8 billion) to support its projects. This cautionary note comes from a top-20 investor, Ingo Speich of Deka Investment, which holds about 0.5% or $53 million worth of Siemens Energy shares, according to LSEG data.
Speich emphasized, “There is a risk that the order book could be negatively affected without guarantees,” further explaining that, “In addition, orders could be held back or cancelled.”
Siemens Energy is currently in discussions to obtain guarantees for performance bonds necessary to safeguard its extensive 109-billion-euro order book, primarily concentrated in the fields of transmission grids and gas turbines.
While there have been concerns regarding the company's financial stability, Speich clarified that Siemens Energy does not face a liquidity problem. Therefore, a capital increase, which has been considered as one potential solution, does not appear warranted at this point.
The talks surrounding the guarantees have drawn significant attention, resulting in Siemens Energy's shares hitting a record low last week. These challenges are closely linked to the turmoil in the renewables sector, which has also affected Siemens Energy's wind turbine division, Siemens Gamesa, a company that Siemens Energy acquired in full earlier this year.
The difficulties faced by Siemens Gamesa have raised questions about the management of Siemens Energy. According to Speich, confidence in the company's leadership has waned due to the issues at Gamesa, which surfaced shortly after the completion of the takeover. However, Speich noted that discussions around major management changes may be premature at this stage.
Nevertheless, the investor stressed the need for the Siemens Energy board to regain the trust of shareholders. He also suggested that Siemens Energy's former parent company, Siemens AG, shares some responsibility in addressing the challenges. Siemens AG still holds a direct 25.1% stake in Siemens Energy, and its management board members are part of Siemens Energy's supervisory board. Additionally, they were part of the board of directors of Siemens Gamesa before its downsizing during the takeover process.