Siemens Energy in talks with govt about potential state guarantees

Siemens Energy tanked on Thursday after confirming it is in talks with the German government about potential state guarantees to shore up its balance sheet.

Responding to press speculation, Siemens said its 2023 results are expected to be fully in line with guidance.

It said the former gas and power businesses are expected to continue their "excellent" performance in fiscal year 2024 and are on track to achieve mid-term targets. Meanwhile, the wind business - Siemens Gamesa - is working through quality issues and addressing the offshore ramp-up challenges as announced in the third-quarter results.

“As Siemens Gamesa is for the time being not concluding new contracts for certain onshore platforms and is applying strict selectivity in the offshore business, order intake and revenue are expected to be lower than market expectations for fiscal year 2024, and net losses and cash outflow are expected to be higher than market forecasts," it said.

"The strong growth in order intake, particularly in the former gas and power business areas, leads to a rising need of guarantees for long-term projects. Considering this requirement, the Executive Board is evaluating various measures to strengthen the balance sheet of Siemens Energy and is in preliminary talks with different stakeholders, including banking partners and the German government, to ensure access to an increasing volume of guarantees necessary to facilitate the anticipated strong growth."

Siemens Energy said its budgeting process is ongoing and no decisions or specific financing measures have been taken with regards to the annual budget for 2024.

At 1100 BST, the shares were down 31% at €7.25, having tumbled earlier after Der Spiegel reported that the company’s chief executive, Christian Bruch, was negotiating with the federal government for several billion euros in guarantees.