Siemens to Wind Down Russia Business; Took EUR600 Million Impairment in 2Q -- Update
By Ed Frankl
Siemens AG said Thursday that it would exit its Russia business
after 170 years, dragging its second-quarter profit below
The German industrial company said second-quarter profit was
affected by around 600 million euros ($630.9 million) due to
impairments and other charges related to Russia, mainly at its
mobility railway-technology segment.
Siemens in March put on hold all new business in Russia, which
in 2021 generated around 1% of the company's revenue.
In comments to the media after second-quarter results, Chief
Executive Roland Busch said that Siemens foresees further risks to
net income in the "low- to mid-triple-digit million range" from
consequences of the Russia exit, though he couldn't give an exact
The exit wouldn't affect the business activities of Siemens
Healthineers AG, he said.
Siemens's net profit in the January-March period was affected as
a result, declining on year to EUR1.21 billion from EUR2.39 billion
a year earlier.
The net-profit figure was below expectations of EUR1.73 billion,
according to analysts' estimates provided by the company.
The year-ago figure included a EUR900 million gain from the sale
of Flender to The Carlyle Group.
However, revenue rose 16% to EUR17.04 billion, while orders
jumped 32% to EUR20.98 billion after double-digit increases in all
Both came in above consensus views of EUR16.79 billion and
EUR19.10 billion, respectively.
The company said it avoided major disruptions from increased
supply-chain risks associated with electronic components, raw
materials and logistics.
"In an extremely challenging environment, our business continues
to be strong," Mr. Busch said.
Siemens confirmed its outlook for fiscal 2022, including 6% to
8% growth in comparable revenue and a book-to-bill ratio above
But recent Omicron coronavirus outbreaks and the lockdowns in
the Chinese cities of Shanghai and Shenzhen pose a risk for the
third quarter, Mr. Busch said.
"The now tangible results of our portfolio optimization and
ongoing mitigation of supply chain challenges allow us to look
confidently into the second half of our fiscal year," Chief
Financial Officer Ralf P. Thomas said.
Write to Ed Frankl at firstname.lastname@example.org
(END) Dow Jones Newswires
May 12, 2022 03:17 ET (07:17 GMT)
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