Siemens Energy to pay dividend as cost discipline pays off

Reuters

By Christoph Steitz

MUNICH -Siemens Energy proposed on Wednesday to pay a dividend on the back of a strong jump in cash flow driven by stricter cost discipline, as it completed its first business year since it spun off from former parent Siemens.

The supplier of turbines and services to the power industry, in which Siemens still holds a direct stake of 35%, said more rigorous demands on clients to make down payments for contracts had partly driven a 39% cash flow rise to 1.36 billion euros ($1.57 billion).

It proposed a dividend of 0.10 euros per share, below the 1.13 euro per share Refinitiv estimate, despite a full-year net loss of 560 million euros triggered by restructuring costs and operating issues at its wind turbine unit.


It also provided an upbeat outlook, expecting its adjusted core profit margin before special items to improve to 3-5% in 2022 from 2.3% this year.


“The measures we have started in the business year 2021 to improve the group’s competitiveness are making an impact,” Chief Executive Christian Bruch said at the group’s annual press conference.

Shares in the group were up 1.4%, among the top gainers in Germany’s blue-chip index.

Bruch said he was satisfied with recent efforts by Siemens Gamesa, the world’s top maker of offshore wind turbines in which Siemens Energy owns 67%, to turn around its struggling onshore division.

“Management has done a lot in recent months,” Bruch said, striking a different tone than in August when he lashed out at the group for being a drag on Siemens Energy’s performance.

Bruch said the group had still not decided on a full takeover of Siemens Gamesa, a deal that would currently cost it 4.63 billion euros excluding a premium, saying such a step would have to create value for shareholders.

($1 = 0.8648 euros)

(Reporting by Christoph Steitz, Editing by Miranda Murray, Emma Thomasson and Shailesh Kuber)

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