Siemens will end its activities in Russia; Suffered a €600m impairment in Q2 – Update
By Ed Frankl
Siemens AG said on Thursday it would exit its Russian operations after 170 years, dragging its second-quarter profit below expectations.
The German industrial company said second-quarter profit was hit by about 600 million euros ($630.9 million) due to writedowns and other Russia-related charges, mostly in its manufacturing segment. mobility rail technology.
In March, Siemens suspended all new business in Russia, which in 2021 generated around 1% of the company’s revenue.
In comments to the media after the second quarter results, Chief Executive Roland Busch said Siemens expects further risks to net profit in the “three-digit million range” from the consequences of the Russian exit, although he could not give a specific time frame.
The exit would not affect the business activities of Siemens Healthineers AG, he said.
Siemens’ net profit over the January-March period was affected, falling year on year to 1.21 billion euros against 2.39 billion euros a year earlier.
The net profit figure was lower than expected by 1.73 billion euros, according to analyst estimates provided by the company.
The figure from a year ago included a €900m gain from the sale of Flender to the Carlyle Group.
However, revenue rose 16% to 17.04 billion euros, while orders jumped 32% to 20.98 billion euros after double-digit increases across all industrial businesses.
Both reached opinions above the consensus of 16.79 billion euros and 19.10 billion euros, respectively.
The company said it avoided major disruptions due to increased supply chain risks associated with electronic components, raw materials and logistics.
“In an extremely challenging environment, our business continues to be strong,” Mr. Busch said.
Siemens confirmed its outlook for fiscal 2022, including 6% to 8% comparable store sales growth and a book-to-bill ratio above 1.
But recent outbreaks of the Omicron coronavirus and shutdowns in the Chinese cities of Shanghai and Shenzhen pose a risk for the third quarter, Busch said.
“The now tangible results of our portfolio optimization and the continued mitigation of supply chain challenges allow us to look forward to the second half of our fiscal year with confidence,” said Chief Financial Officer Ralf P. Thomas.
Write to Ed Frankl at [email protected]