16.4 C
Cairo
March 3, 2024
Business

Shares of Siemens Energy nosedive 35 percent post government aid request

In a dramatic market response, Siemens Energy saw its shares plummet by 35% on Thursday, subsequent to its appeal to the German government for financial guarantees. This comes in the wake of the wind power behemoth’s earlier decision to abandon its profit projections, primarily because of escalating component failure rates at its wind turbine division, Siemens Gamesa. The spotlight shone bright on Siemens Energy this August, during a visit by German Chancellor Olaf Scholz. He inspected a gas turbine destined for the compressor station of Russia’s Nord Stream 1 gas pipeline at the company’s Muelheim an der Ruhr facility.

Shares of Siemens Energy nosedive 35 percent post government aid request

Reflecting on its growth trajectory, particularly in the former Gas and Power sectors, Siemens Energy stated that its upswing in order intake necessitated increased guarantees for long-haul projects. “With a view to bolster Siemens Energy’s financial position, the Executive Board is contemplating various strategies. Preliminary discussions have commenced with diverse stakeholders, which include banking associates and the German government,” the company disclosed.

Leading German business magazine, WirtschaftsWoche, revealed that the energy titan could be gunning for guarantees amounting to a staggering 15 billion euros ($15.8 billion). When CNBC reached out, Siemens Energy chose not to comment on this reported amount. Nevertheless, the firm did confirm that its financial outcomes for the fiscal year 2023 are set to match its previously stated expectations.

As Siemens Energy gears up to unveil its fiscal results for the fourth quarter on November 15, they’ve indicated that decisions regarding their 2024 annual budget remain pending. However, addressing concerns about its wind turbine division, the company stated, “Siemens Gamesa is currently navigating through the quality-related challenges and tackling the issues related to offshore scale-up as communicated in the third quarter of the fiscal year 2023.” This latest tumble means Siemens Energy’s stock has now depreciated by a significant 60% since the start of the year, marking its position at the nadir of the pan-European Stoxx 600 index during Thursday’s trading session.

Related posts

ADNOC announces gas discovery offshore of Abu Dhabi

Admin

UAE to introduce federal corporate tax on business profits from June 2023

Admin

Masdar GEDP sign deal to develop largest solar power plant in Georgia

Admin

UAE to participate in Gujarat investor summit as Partner Country

Admin

ADNOC, TAQA announce $3.6 billion project to decarbonise operations

Admin

Renewable energy and innovation in focus as ME LPG Week concludes

Admin