Siemens posts billion euro loss

German industrial giant Siemens said Thursday it suffered a net loss of €1 billion in the last quarter of its 2008/09 fiscal year, and expected the current year to be worse.

Siemens posts billion euro loss
Photo: DPA

Earnings from the year that ended on September 30 were slammed by €1.962 billion in charges stemming from the group’s Nokia Siemens Networks unit which Siemens owns with the Finnish telecommunications equipment maker Nokia.

In the fourth quarter of its 2007/08 fiscal year, Siemens had reported an even bigger net loss of €2.4 billion owing to one-off restructuring costs and provisions for settling an alleged bribery case.

This time around, several divisions suffered from the economic crisis, which put the brakes on demand for its industrial goods.

The group is a good gauge for activity in the global manufacturing sector, with more than 400,000 workers in 190 countries making everything from light bulbs to medical equipment, power generators and high-speed trains.

Siemens’ full year net profit plunged by 58 percent to €2.5 billion, but the previous year’s result had been boosted by the sale of the auto parts company VDO.

Sales in 2008/09 slipped by just one percent to €76.7 billion, while orders were down by 16 percent at €79 billion.

Operating profit at the group’s energy, industry and health divisions rose by 25 percent meanwhile to €1.9 billion in the last three months of its fiscal year, and by 13 percent to €7.5 billion for the year as a whole.

Siemens chief executive Peter Löscher hailed the “stable revenue development and our robust profit on an operational basis,” and the group said it would propose an unchanged dividend of €1.60 per share.

Fourth quarter sales lost nine percent to €19.7 billion, while orders were also off by 16 percent at €18.75 billion.

Analysts polled by Dow Jones Newswires had expected fourth quarter orders to fall by 23 percent however, and sales to be off by 11.4 percent.

Looking ahead, Siemens forecast a five percent drop in sales for the 2009/10 fiscal year, and an operating profit of between €6 billion and €6.5 billion.

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‘We’ll continue our protests’: Environmental activists confront Siemens bosses in Munich

Siemens chief executive Joe Kaeser faced environmental protests inside and outside the group's annual shareholder meeting on Wednesday.

'We'll continue our protests': Environmental activists confront Siemens bosses in Munich
Demonstrators in Munich on Wednesday. Photo: DPA

Outraged by the group's sticking to a contract to supply rail equipment to a massive Australian coal mining project, demonstrators were rallying outside the Munich Olympiahalle ahead of the 10:00am kickoff.

A group of around 100 were on the scene from early in the morning, some forming a human chain.

Late Tuesday, Greenpeace had draped a banner from the company's headquarters reading “Bush fires start here”.

“We will continue our protests for as long as Siemens doesn't back down,” said Helena Marschall, a representative of the movement, at a Tuesday press conference.

Marschall herself is slated to speak inside the venue later Wednesday, while the demonstrators plan to urge the company to “abandon coal” at a larger protest in the afternoon.

Kaeser kept activists and observers on tenterhooks for weeks as he decided whether to uphold a contract with India's Adani group related to its Carmichael mine project in Australia.

In the end, he stuck to Siemens' agreement to supply the rail signalling equipment for the massive open-cast mine, not far from the iconic natural landmark of the Great Barrier Reef.

READ ALSO: Outrage in Germany as Siemens back Aussie mine project

'Fulfil contractual obligations'

Groups like Extinction Rebellion and Fridays for Future have homed in on the shareholder meeting as an opportunity to renew the pressure on Siemens.

“What's more important: a small financial loss in the short term, or the disastrous consequences such a project will have for generations?” Marschall said.

She and other environmentalists have been invited to speak inside the cordon by a group of Siemens shareholders.

In mid-January, CEO Kaeser met leading German Fridays for Future activist Luisa Neubauer after protests across the country against Siemens.

But he later said in a statement: “We must fulfil our contractual obligations” relating to the 18-million-euro ($22 million) deal.

Protesters at the meeting. Photo: DPA

“Only being a credible partner whose word counts also ensures that we can remain an effective partner for a greener future,” Kaeser insisted.

Nevertheless, the company plans to create a “Sustainability Committee” with powers to block environmentally questionable projects.

Siemens says it backs the 2015 Paris Agreement and aims to become carbon-neutral by 2030.

27 mn tonnes of coal

The open-cut Carmichael mine is set to become operational next year and produce up to 27 million tonnes of coal annually.

Adani spent years trying to secure private finance for the coal mine before announcing in 2018 it was self-financing a trimmed-down, $2 billion version of the  project.

Supporters say the mine will bring hundreds of much-needed jobs to rural Queensland in eastern Australia.

But conservationists say the project threatens local vulnerable species and notes that the coal will have to be shipped from a port near the already damaged Great Barrier Reef.

Much of the coal from the mine will be burned in India, a country with some of the world's highest levels of air pollution.

By Ralf Isermann with Tom Barfield in Frankfurt