Siemens closes all business in Russia: shares collapse

Expected sale of subsidiaries

An important part of the account: the sale of four subsidiaries and stakes is expected to increase Siemens’ profits from 2.1 to 2.3 billion euros in the current fiscal year. The profit from the sale of the Yunex Traffic road division to Italian Atlantia alone is likely to be enough to offset the costs of the withdrawal from Russia of around 600 million euros, CFO Ralf Thomas said on a conference call Thursday.

But the demise of Russian business poses other financial obstacles. Due to branch settlement and cancellations in the SFS Financing Division, there is still a risk in the low to medium triple digit million range.

Gamesa child problem ensures a worse balance sheet

Separation from Gamesa has been in the air for a long time. The Spanish subsidiary for wind energy belongs to Siemens Energy and pushed the group into the red in the first quarter. Troubled daughter Siemens Energy is now ruining the quarterly balance sheet.

Siemens CFO Ralf Thomas is now lobbying the management of former energy technology subsidiary Siemens Energy. “We are not at all happy with the current development,” Thomas said Thursday when the tech group unveiled its quarterly data. “And we are certainly not the only shareholders who think so”. Siemens still owns 35 percent of Siemens Energy and is feeling the negative effects of Gamesa. Siemens wants to reduce the stake to 25 percent, but is reluctant to do so due to price losses. Furthermore, the losses are reflected in the profits of the former parent company.

Thomas, who also sits on the supervisory board of Siemens Energy, is now counting on Capital Market Day May 24. Siemens expects “a clear perspective and greater planning security” from this. The energy technology group has had to correct its forecasts several times, mainly due to operational problems at its Spanish wind energy subsidiary Siemens Gamesa.

“It will be revolutionary, we assume,” said Thomas. With Jochen Eickholt and Tim Dawidowsky, two experienced group reorganisers are now at the helm of Siemens Gamesa. “But they can’t do magic and walk on water,” the chief financial officer said.

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