The world's largest producer of offshore turbines has issued a string of profit warnings as it struggles to iron out complex internal procedures in the production of a new onshore turbine, the 5.X, piling pressure on a business model already challenged by the rising costs of raw materials such as steel.
"The biggest thing really for us is to stabilize the 5.X project," Siemens Gamesa CEO Jochen Eickholt told Reuters. "We have given ourselves a target for the end of the calendar year, and that's on track."
Nevertheless, he added: "it remains challenging."
Despite strong demand for technology that will transform the world's economies to run on renewable energy sources like the wind and sun, turbine makers have struggled to turn a profit.
As far back as 2017, some governments started scrapping generous tariffs in favour of competitive auctions, leaving turbine makers exposed to runaway logistics and metals costs, politically-motivated import duties and the fallout from COVID-19 and Russia's invasion of Ukraine.
Competition from newer entrants, particularly Chinese firms, has also squeezed Siemens Gamesa, especially in markets including Brazil and India, Eickholt said.
Eickholt said 10-15% of 100 onerous projects related to the 5.X would stretch into 2024.
Siemens Gamesa's woes prompted its parent Siemens Energy to launch a bid in May for the roughly one-third stake in the turbine group it does not already own and take it private to nurse it back to health.
The deal is awaiting final approval from the market regulator in Madrid, where Siemens Gamesa was listed in 2017.
In the meantime, Siemens Gamesa has engaged in tough discussions with customers to raise selling prices, with some success, Eickholt said.
"We are making ... difficult, step-by-step progress," Eickholt said. The last three months' trading has been "kind of solid-ish. Not too good, not too bad either," he added.
(Reporting by Isla Binnie in Madrid and Christoph Steitz in Frankfurt; Editing by Mark Potter)
By Isla Binnie and Christoph Steitz