Siemens Energy registered a record net loss in the third quarter of the, the company said Monday, largely attributed to the 1.6-billion-euro ($1.7 billion) hit to fix technical problems with its onshore wind turbines.
The group had warned in June that quality issues at its troubled Siemens Gamesa wind unit were worse than previously thought, sending its share plunging more than 30%.
After initially estimating the repair costs at over a billion euros, Siemens Energy announced a charge of 1.6 billion euros to resolve the issues affecting "certain rotor blades and main bearings in the 4.X and 5.X platforms."
The charge weighed heavily on the company's overall performance in its fiscal third quarter, which slumped to a net loss of 2.9 billion euros, the most since the company was formed in 2020 as a spin-off of German industrial manufacturer Siemens.
The company had booked a loss of 564 million euros in the same period a year earlier.
"Our third-quarter results demonstrate the challenges in turning around Siemens Gamesa. The strong performance of our other business areas gives me confidence in our company's ability to put businesses back on a strong footing", said Siemens Energy CEO Christian Bruch.
The latest result was also dragged lower by extra charges of 600 million euros in its offshore wind business, which has been hit by "higher product costs" and difficulties in ramping up capacity.
Siemens Energy said it was "additionally burdened" by a 700-million-euro write-down of deferred tax assets during the quarter.
Group revenue increased by 8% on a comparable basis to 7.5 billion.
Looking ahead, The Munich-based company now expects a significantly larger full-year net loss of around 4.5 billion euros, after a loss of 712 million euros last year.
Siemens Energy said it had set up "a special committee for a detailed investigation of the quality and productivity problems at Siemens Gamesa."
The company plans to give an update on its wind strategy at an investor day in November.
CEO Bruch, nonetheless, expressed optimism about the future.
The company saw a jump in orders in the third quarter, with those at the Siemens Gamesa unit alone more than doubling year-over-year.
"We believe more than ever in the potential of wind power," Bruch told reporters during a conference call.
The long-running woes at Gamesa prompted Siemens Energy last year to take full control of the Spanish subsidiary, but a hoped-for turnaround has yet to materialize.
The specific issues plaguing Gamesa come at a challenging time for the wind power sector in general in Europe.
Despite growing demand for clean energy, the sector has been battered by higher prices for materials, persistent supply chain disruptions and strong competition from China.
Siemens Energy was the biggest faller on Germany's blue-chip DAX index just after 0915 GMT, with shares in the company dropping more than 3%.
Siemens Energy was spun off from Siemens three years ago and taken public. Since then, the group has not closed a fiscal year in the black, as problems with Gamesa caused profit outlooks to be slashed and pushed the numbers deep into the red.
In order to get a better grip on the situation, Siemens Energy completely took over the wind power subsidiary last year by securing the outstanding shares it did not own.
Analysts say Bruch's future is likely to depend on whether and how quickly the wind turbine problems are solved.