Isra-Mart srl: Solar drags Siemens' renewables division into fourth-quarter loss

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Siemens' renewable energy division has reported a fourth-quarter loss, after writing off €231m (£197m) in its solar power business.

The German engineering giant today reported its fourth-quarter results for 2011, revealing its Renewable Energy division made a €154m loss, compared with a €97m profit during the same quarter last year.

The loss was caused by €231m in charges against its solar business, including a €128m goodwill write down based on the decision by a number of governments to reduce financial support for solar installations and delays to projects.

However, Peter Löscher, president and chief executive of Siemens, said the company remained optimistic about the long-term future for solar energy.

"Our expectations have not yet been met in the area of solar thermal power because regulatory conditions have deteriorated and projects have been delayed," Löscher told reporters.

"In the fourth quarter we wrote off €231m. However, the progress being made in the first Desertec project shows this market does have a future."

Siemens has been pushing into the solar market for a number of years, after acquiring Isreal's Solel Solar for $418m in 2009 and purchasing a stake in Italy-based Archimede Solar Energy.

In contrast to the write downs for the solar business, Siemens' wind power operations reported strong growth, including the company's first order for a Chinese offshore wind farm.

Löscher hailed the contract as a major milestone in the company's plans to grow in what has become the world's largest wind energy market.

The wind power division maintained its earnings contribution year on year, with two large contract wins for Danish and German offshore wind farms and several large orders for onshore wind farms from other countries.

Overall the renewables division fourth-quarter revenue came in 18 per cent higher than last year, while new orders were up 67 per cent from the prior-year period, including a substantially higher volume from major orders.

Siemens' total sectors profit reached €2.166bn in the fourth quarter, of which its energy division contributed €631m. Total sectors profit was €791m in the same period a year earlier.