July 30, 2019 / 6:40 AM / 2 months ago

UPDATE 1-Siemens Gamesa slightly lowers 2019 profit expectations

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MADRID, July 30 (Reuters) - Wind turbine maker Siemens Gamesa slightly trimmed its full-year profit margin forecast on Tuesday and said it had started raising prices to stave off continued pressure.

Profits have fallen across the wind power industry in recent years as governments have introduced competitive auction systems that favour the lowest bidders, shifting away from subsidising generous fixed tariffs.

The company, formed by a merger of Spain’s Gamesa with the wind business of Germany’s Siemens, said it expected to hit the lower end of its full-year profit margin guidance, having previously said it would hit the middle of a 7-8.5% range.

Revenue jumped 23% to 2.63 billion euros ($2.9 billion) in April-June, its third quarter, from a year earlier, boosted by a blockbuster order for offshore turbines from Taiwan, it said.

That beat a forecast provided by the company drawn from analyst estimates, which pointed on average to earnings of 2.49 billion euros.

But its margin on earnings before interest and tax came in at 6.1%, missing a forecast of 6.7%, and it warned sales volumes and margins would continue to face pressure in the immediate future.

Trade tariffs mutually applied by the United States and China, Britain’s exit from the European Union, a global economic slowdown and volatility in emerging markets all represented threats, the company said.

To counter these risks, the company said it had started raising prices in the third quarter, and introduced a new turbine model. (Reporting by Isla Binnie, editing by Andrei Khalip and Susan Fenton)

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