Siemens Energy is anticipating a €4.5bn (£3.9bn) loss this year after the German group reported problems with its wind power business.

The firm warned that it is required to resolve quality problems within its turbine division, concerning rotor blades at its onshore platforms, and that a taskforce consisting of experts from Siemens Energy and Siemens Gamesa, the group’s wind turbine division, is dealing with the identified problems.

Siemens Energy is one of the world’s largest energy technology companies, with an estimated one-sixth of the electricity generated worldwide based on technologies from the group. It employs around 93,000 people worldwide in more than 90 countries and generated revenue of €29bn (£25bn) in the 2022 fiscal year.

The group, which has operations in the UK, announced that the expected costs for remedying its wind turbine problems have been considered in the third quarter – with charges for future expenses amounting to €1.6bn (£1.4bn).

In addition to these quality-related charges, Siemens Gamesa is expecting higher product costs in the offshore sector, which means that projects already committed to contractually cannot be completed profitably if implemented by its customers. This has led to additional charges of €600m in Q3.

Siemens Gamesa is currently in the process of ramping up various factories for offshore production or converting them to larger turbines, including in the UK, as well as in Germany, France and Denmark.

“The immediate liquidity outflow in fiscal 2023 is low,” a statement from Siemens revealed. “The main part of the expected repair costs is expected in fiscal 2024 and 2025.”

Despite the additional charges, Siemens still said it has a “strong balance sheet”, with both cash and cash equivalents totalling around €4.3bn (£3.7bn).

Nevertheless, in terms of the group’s forecast for the fiscal year ending 2023, Siemens is expecting comparable revenue growth to be in a range of 9% to 11% meaning a profit margin, before special items, between -10% and -8%.

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