Siemens Boosts Profit Forecast As Renewables Demand Rise

Siemens boosts profit forecast as renewables demand rise

BERLIN,(APP - UrduPoint / Pakistan Point News - 4th Augst,2016) - German industrial group Siemens lifted its annual earnings forecast on Thursday after its order book swelled last quarter with booming demand for renewables. In a statement, the firm said it expected profits per share between 6.50 and 6.70 Euros ($7.24-7.46), compared with the 6.0 to 6.40 it had previously predicted. Chief executive Joe Kaeser said in a statement that Siemens "delivered excellent performance, especially with regard to growth, in an increasingly difficult market environment". In April through June its order book bulged to 21 billion euros, a 6.0 percent increase over the same period in 2015, boosted by both demand for renewables as well as power and gas. At 2.7 billion euros, its renewables orders were almost four times larger this quarter -- which also saw it announce the merger of its wind turbine business with Spain's Gamesa in June -- than the same period last year. During the three months, the group won contracts to build offshore wind farms in Britain and Germany for a total of almost 2 billion euros. Meanwhile, the power and gas unit also booked over 1 billion euros of new business in the United States and Bolvia.

The group, which builds products ranging from trains to gas and wind turbines to medical equipment, said it had made a net profit of 1.37 billion euros in its third quarter, with little change from last year's figure. The 2015 figure had been artificially high after it sold some business units. But the group reported a jump in underlying, or operating, profit as measured by EBITDA, of 41 percent to 2.67 billion euros on revenues of 19.8 billion euros -- up five percent compared with last year. Analysts at DZ bank welcomed a "better than expected" third quarter for Siemens, saying that the group's restructuring and the Gamesa merger were beginning to pay off. The group said that it expected "moderate revenue growth" for the whole of the 2015-16 financial year after adjusting for Currency effects. Siemens shares were the best performers on the Frankfurt DAX index of leading German companies on Thursday morning, gaining almost 3.0 percent by just after 0700 GMT.