Developer exposure to Siemens Gamesa woes limited for now - Citi (updated)

Schaeffler AG

29/06/2023 13:39

(Adds comment from bearings maker Liebherr)
       FRANKFURT/DUESSELDORF, June 29 (Reuters) - 
    Renewable energy project developers have limited exposure to
the wind turbines that are at the heart of far-reaching quality
issues at Siemens Energy's  ENR1n.DE  Siemens Gamesa division,
brokerage Citi said.
    Siemens Energy last week warned of quality problems at up to
30% of its onshore fleet, sending its shares down more than a
third on fears of the associated costs, which UBS has put at
more than 5 billion euros ($5.5 billion) in a worst case
scenario.
    Citi said that Siemens Gamesa's 4.X and 5.X, its two most
recent onshore wind turbine platforms, seemed to be at the
centre of concerns, chiming with similar comments from
Portugal's EDP Renovaveis a day earlier.
    "None of the developers we spoke to are currently
experiencing issues with their onshore (Siemens Gamesa)
platforms or have been communicated delays in offshore
deliveries," Citi wrote in a note on Thursday.
    Citi's comments, which draw on discussions with developers,
come after RWE  RWEG.DE , Iberdrola  IBE.MC  and Copenhagen
Infrastructure Partners, this week said that they had so far not
observed any problems with their fleet of Siemens Gamesa
turbines.
    As a result of the problems, which are linked among others
to bearings and blades, Siemens Energy withdrew its 2023 profit
guidance. Bearings maker Liebherr, which along with Thyssenkrupp
and Schaeffler is a supplier to Siemens Gamesa, said its
products were not affected.
    "It appears developer exposure to (Siemens Energy's) profit
warning is limited, at least for now," Citi said, adding that
while Britain's SSE  SSE.L  had no exposure to the X series, it
put the company's overall onshore exposure to Siemens Gamesa at
55-60%.
    The brokerage added that investors, during meetings this
week, had pointed to a raft of profit warnings by wind turbine
makers, thin returns for offshore as well as higher costs as a
challenge to turn a profit in the sector.
    "Until confidence returns, renewables share prices may just
be treading water."
($1 = 0.9153 euros)

 (Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by
Conor Humphries)
 ((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))