Siemens drops revenue target over virus impact

Monitoring Desk

FRANKFURT AM MAIN: German industrial conglomerate Siemens on Friday withdrew its 2020 revenue targets, saying the coronavirus pandemic would weigh heavily on sales in its April-June quarter. “We expect a moderate decline in comparable revenue in fiscal year 2020,” Siemens said in a statement, as it reported net profits down by an annualised 64 percent in January-March, at 697 million euros ($755.77 million).

Chief executive Joe Kaeser hailed a “robust quarter given the circumstances”, forecasting the group would “reach the bottom in the third quarter of fiscal 2020”.

Over the past quarter, “despite the coronavirus pandemic, Siemens was able to operate production sites and supply chains near normal levels,” the group said. But “a decline in demand and restricted access to customer sites in affected regions” sapped both activity and financial flows over the quarter, it added.

Addressing the coronavirus’ impact directly, Kaeser said in a telephone conference that “it’s too early to give an estimate of how long this situation will last and when the global economy will recover.”

Siemens saw new orders fall by nine percent in its second quarter, especially owing to fewer large contracts in its train-building mobility division that were only partly made up for by increased demand at its Healthineers medical devices branch.

The group plans to find 165 million euros of extra savings per year on top of an existing cost-cutting drive, bringing its total target to 475 million.

And despite the pandemic, Siemens still aims to float its energy division on the stock market by October, a unit that groups its gas and wind turbines activities.

The wind turbine components business Flender, with annual revenues of around two billion euros, is also slated for a separate stock market listing. (AFP/APP)