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    Egypt Boosts Siemens Earnings


Germany's Siemens reported net profit EUR1.44 billion in Q2, which ended on March 31. Power and gas profit margin rose to 13.6%, from 12.3% in the Q2.

by: Murat Basboga

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Natural Gas News, Corporate, Investments, Financials, News By Country, Egypt, Germany, Iran

Egypt Boosts Siemens Earnings

German engineering giant Siemens recorded strong rise in profit in its second quarter 2016 which ended March 31, spurred by a growth in orders for gas-fired power plants and wind turbines.

Operating profit in its industrial business rose 28% to €2.12bn, from €1.66bn in its Q1 period (October-December 2015). Net profit fell 63% to €1.44bn, because the 2015 figure was inflated by €3bn of one-off gains.

Major orders in Egypt (gas-fired power plants) and the UK (windfarms) helped drive the group's second-quarter orders up 7% year-on-year to €22.3bn.

Its industrial business profit margin rose to 10.9%, from 9% last year. Consensus forecast for this number was 9.8%.

Its power and gas business profit margin rose to 10.8% in the quarter, before restructuring costs.

Profitability was boosted by the company's resumption of business activities in Iran following the lifting of international sanctions earlier this year.

Siemens also benefited from a €3.1bn order from Egypt during the January-March quarter for the new Burullus and New Capital power plant orders, including long-term service contracts. Project execution of a prior Egyptian order also progressed, with 4 out of 8 turbines shipped to the country.

After 35 years at Siemens, Anton Huber is retiring and being replaced by Jan Mrosik who has been the co-CEO of the Energy Management division.

The company maintained its guidance for the current fiscal year (October 2015 to September 2016), but said the market environment for its high-margin short-cycle businesses "may not pick up materially" in April to September 2016 as much as originally forecast. It expects earnings per share in a range of €6 to €6.40.

On May 3, German businesses took part in a trade gathering in Tehran. Junior economy minister Uwe Beckmeyer said: "The major participation of over 100 German businessess is a signal to Iran, that Germany is ready to revive its trade relations that grew over many years with know-how and innovative technology."


Murat Basboga