July 30, 2020 / 6:52 AM / 9 days ago

Siemens Gamesa hires new executives as COVID-19 helps cut $1.2 billion from sales outlook

MADRID (Reuters) - Siemens Gamesa (SGREN.MC) named new senior executives on Thursday as the wind turbine maker sought to tackle a coronavirus-driven downturn that has led the group to cut its sales outlook for the year by 1 billion euros ($1.18 billion).

The Siemens Gamesa logo is displayed outside the company headquarters in Zumudio, near Bilbao, Spain, November 28, 2017. REUTERS/Vincent West/Files

Despite a widespread shift to renewable energy sources, profiting from making wind turbines has become trickier in recent years as governments move towards competitive auctions for power production.

The added impact of coronavirus will be harsher than expected, the company said, with lower turbine sales and slower project execution in northern Europe all contributing to a predicted negative operating margin on full year earnings.

Chief Executive Andreas Nauen, who took over last month, said the appointments - including that of NH Hotels’ executive Beatriz Puente as CFO from Dec. 1 - was aimed at driving a turnaround.

The troubled onshore unit will get a new chief in the form of Lars Bondo Krogsgaard, formerly co-CEO of MHI Vestas and CEO of Nordex Acciona. Juan Gutierrez will move from heading services in the Americas to running the global services unit.

They face industry-wide challenges such as the high cost of steel - partly due to trade battles between the United States and China - as well as snarled supply chains, halted manufacturing and projects delayed by the pandemic.

Sales fell 8.4% in April through June compared with a year before, while the company made a loss before interest and tax, which also excludes other items, of 161 million euros, with a margin relative to sales of negative 6.7%.

Despite the falling numbers, shares rose and were still leading gainers on a broadly negative Madrid bourse .IBEX, up 5.4% on the day at 1349 GMT.

Orders shrank 44% annually because of COVID-19, an economic slowdown in India and uncertainty in Mexico.

Nauen said last week some of the setbacks had been of the company’s own making, and some were external.

“We have no illusions about the difficult circumstances we find ourselves in, and we are fully focused on turning the ship around,” he said.

Reporting by Inti Landauro; Editing by Ingrid Melander, David Holmes and Jan Harvey

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