Siemens optimistic for 2019 despite energy woes

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Siemens on Thursday expressed optimism for the year ahead despite a "difficult environment" as the German industrial behemoth embarks on a revamp to counter falling demand for its large gas turbines.

The conglomerate reported a net profit of 6.1 billion euros ($7.0 billion) for its 2017/2018 fiscal year, the same level as the previous year.

Revenues at the sprawling group -- which also builds trains, industrial robots and medical scanners -- climbed two percent to 83 billion euros.

"This shows the strength of our global team which competed convincingly in both growth markets and difficult environments, and achieved another strong performance," said chief executive Joe Kaeser in a statement.

Looking solely at the fourth quarter, net profit slumped 46 percent to 681 million euros on the back of "sharply higher" tax expenses and negative currency effects.

Earnings were also dragged down by Siemens' ailing power and gas unit which has long struggled with declining demand as energy trends shift towards renewables.

Despite several large new orders, including from Egypt, the unit posted a loss of 139 million euros as it was hit by 300 million euros in charges linked to Siemens' efforts to "improve the division's competitiveness".

As part of its Vision 2020+ strategy, Siemens has said it plans to cut 7,000 jobs at the unit.

German media reported in August that up to 20,000 jobs could be scrapped at the group worldwide under the restructuring, but Siemens made no mention of that in its statement.

There was better news at the group's digital factory arm which makes high-tech equipment for production lines and saw double-digit growth in order intakes and profit over the final quarter.

Siemens Mobility, the group's transport unit, also put in a strong performance as it readies for a mega-merger with France's Alstom.

The tie-up, intended to create a European train-building champion, is scheduled to be completed "in the first half of 2019".

Looking ahead to the 2018/2019 fiscal year, Siemens said it expects "a continued favourable market environment" with "limited risks related to geopolitical uncertainties".

The group said it was forecasting "moderate growth" in revenues as it focuses on carrying out its Vision 2020+ revamp.

The plan involves reducing the number of industrial units to make them more independent and better able to respond quickly to market demands, a trend also seen among other global conglomerates.

Siemens added that it plans to increase its dividend by 0.10 euros per share, to 3.80 euros.

It also announced that it would buy back three billion euros in shares by November 2021.


© 2018 AFP

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