S&P places Siemens Energy on watch

S&P said it placed its BBB- long-term issuer credit ratings on Siemens Energy AG, its subsidiaries, and its unsecured debt, on CreditWatch with negative implications.

On Oct. 26, Siemens Energy it expects its order intake, revenues, earnings, and cash flow generation for the fiscal year ending on Sept. 30, 2024, will be below market expectations, citing operating challenges at its subsidiary Siemens Gamesa Renewable Energy SA (SGRE), the agency noted.

“At the same time, Siemens Energy's former gas and power businesses are expected to continue to perform very strongly and are on track to achieve their short-term and mid-term targets,” S&P said in a statement.

The agency said it could cut Siemens' rating a notch if it “fails to present a creditable strategy to resolve the operational challenges at SGRE and cannot address the continued high cash flow volatility and significant operating losses, leading us to conclude that a meaningful recovery in profitability is unlikely over the next 24 months.”

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