Siemens sees bigger hit from coronavirus impact coming as second-quarter profit plunges

ZURICH (Reuters) – Siemens (SIEGn.DE) said on Friday it expected "even stronger impacts" of the coronavirus pandemic in the coming weeks, as it abandoned its 2020 orientation and saw an 18% drop in industrial profit during the second quarter.

ARCHIVE PHOTO: The logo of the German industrial group Siemens is seen in Zurich, Switzerland, on January 30, 2019. REUTERS / Arnd Wiegmann

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The trains for the industrial software maker said they now expect a "moderate decline" in comparable revenue for the entire year. Siemens previously predicted moderate growth.

Its main manufacturing automation unit and smart infrastructure business would be the hardest hit, the company said.

During the second quarter, Siemens said that all of its operations were affected by the COVID-19 pandemic, as shareholders' net profit fell 64% to 652 million euros. (US $ 706.90 million)

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The group's orders fell 8% to 15.15 billion euros, while adjusted operating profit for its industrial businesses fell 18% to 1.59 billion euros.

Revenue was stable at 14.23 billion euros, with increases in Siemens Healthineers and its train mobility unit offsetting a decline in Digital Industries.

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The figures do not include Siemens Gas and Power and Siemens Gamesa Renewable Energy, which are being separated into a new company called Siemens Energy that will be launched later this year.

During the first quarter, discontinued operations recorded a loss of 317 million euros, below the previous year's net profit of 205 million euros.

Chief Executive Joe Kaeser, who is expected to step down early next year and become president of Siemens Energy, described the group's performance as a "robust quarter, given the serious circumstances".

"We hope to hit the bottom in the third quarter," he said, adding that he was satisfied with Siemens Energy's spin-off in late September.

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Siemens said it also plans to separate and list Flender, its mechanical drive manufacturer that has annual sales of around 2 billion euros. Shareholders will vote on the plan at the next AGM in February 2021.

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Reporting by John Revill; Editing by Michelle Martin

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