Siemens cuts outlook on delayed wind projects

We are addressing the problems systematically,group Chief Executive Peter Loescher said after reporting a two thirds drop in quarterly net profit from continuing operations to 1.05 billion euros 1.39 billion.

Shares in Germany8217;s biggest company by market capitalisation were indicated to fall 0.5 percent,according to pre-market data,while the German blue-chip index was seen 0.4 percent higher.

Siemens said it now saw net profit from continuing operations for its 2011/12 year to end-September at 5.2-5.4 billion euros,down from a previous outlook for 6 billion.

Analysts had expected Siemens to cut its outlook,with consensus at about 5.2 billion euros,after delays with wind power projects led to an unexpectedly sharp fall in first-quarter core profit.

Second-quarter order intake slumped by 13 percent to 17.88 billion euros,missing a consensus forecast of 20.14 billion,as Siemens received fewer big contracts in Germany,India and China.

CEO Loeschersaid Insider TV that China,which accounted for about 15 percent of new orders,had a slow economic start to the year but began picking up in March.

The Asian country was the only region where Siemens8217; quarterly revenue declined,sliding by 6 percent to 1.35 billion euros,while group revenue was up 9 percent and above expectations.

FUTURE BURDEN

The German offshore market is expected to grow rapidly in the coming years as Berlin banks on wind farms to help it shift its energy mix toward renewables and away from nuclear power.

But Siemens,which sees itself at the forefront of Germany8217;s push for greener energy,has struggled to make headway in several projects to connect wind farms off the German North Sea coast with mainland power grids.

It has blamed delays and rising project costs on a complex German regulatory approval process. Its main rival in the business is Switzerland8217;s ABB,which earlier posted slightly weaker than expected quarterly profit.

The Power Transmission business 8211; which generated about 8 percent of quarterly group revenue 8211; took a 278 million euro hit in the second quarter,after 203 million of charges in the first quarter,and had a loss of 169 million euros.

Loeschersaid Insider TV in an interview that the majority of charges should have been taken now in the Power Transmission business.

But due to the fact that there is a long implementation lead-time,how you implement these kinds of highly complex grid access projects,we have to anticipate that our Pamp;L profit and loss statements will be impacted going forward.

Several companies,including top German utilities E.ON and RWE,have warned that delays in the connection of wind parks to the grid could lead to the collapse of the country8217;s offshore plans.