Siemens Energy expects limited US tariff hit, raises prices for new orders
Siemens Energy said its net profit rose nearly fivefold to €501 million in Q2. (EPA Images pic)
FRANKFURT : Power equipment maker Siemens Energy expects a limited hit to profits from US tariffs, citing price increases for new orders, as well as a drive to find more local suppliers for parts it needs in its single biggest market.
CEO Christian Bruch said most of the German group's orders contained price adjustment clauses that were cushioning the fallout from far-reaching import tariffs announced by the Trump administration last month.
Calling the tariffs 'annoying but manageable', Bruch said that while it was too early to assess their future scope, his discussions with US representatives had shown a certain flexibility to change if the local economy was at risk.
'The question will always be 'does it help the USA?'', Bruch told journalists after presenting second-quarter (Q2) results.
'And if it becomes apparent that things are becoming structurally more expensive in the USA, I do believe that there is an openness there,' Bruch said.
The US accounts for around a fifth of Siemens Energy's sales and is home to 12% of the group's staff as well as eight of its production locations that make everything from wind and gas turbines to power grid equipment.
Siemens Energy fleshed out steps to cushion the impact of duties, including measures to buy more supplies locally and better leverage its US 'footprint for production, processing and repair of key components'.
Bruch said the company currently had about 5,000 local suppliers in the US.
Factoring in mitigation measures, the company said it expected 'up to a high double-digit million euro' hit to its 2025 net profit, quantifying for the first time the impact of the broad US import tariffs.
It currently forecasts a net profit of up to €1 billion (US$1.1 billion) for its fiscal year ending September.
The company's stock was up 3.6% at 8.44am, the biggest rise on Germany's blue-chip index, with analysts pointing to better than expected quarterly results.
Siemens Energy said its net profit rose nearly fivefold to €501 million in Q2, beating analysts' average estimate of €217 million in an LSEG poll.
Peer GE Vernova said last month it expected a cost impact of US$300 million to US$400 million this fiscal year from the tariffs, which have started to disrupt global supply chains.
Siemens Energy said its results for January-March, most of which were flagged in April, marked its best quarter since it was spun off from former parent Siemens AG in 2020.
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