Key Points

• 1.58 billion euro net profit
• Record-breaking 118 billion euro backlog
• 12.6% YoY revenue growth

Due in part to an increase in orders and a one-time benefit from selling a portion of its Indian affiliate to parent firm Siemens, Siemens Energy turned a profit in its first fiscal quarter.

The sale of the German renewables company's 18% share in Siemens Limited, an Indian company, for 2.1 billion euros was the main factor in its 1.58 billion euro ($1.7 billion) net profit.

Siemens Energy reported a record-breaking order backlog of 118 billion euros, with a book-to-bill ratio of 2.01 and a 23.9% year-over-year growth in orders to 15.4 billion euros.

Revenue increased to 7.6 billion euros on a comparable year-over-year basis, up 12.6%. The company's grid technology segment showed very impressive results.

A year ago, during the same quarter, the business lost 282 million euros due to quality-related costs at its struggling wind turbine subsidiary Siemens Gamesa. However, this year's profit before exceptional items spiked to a positive 208 million euros.

According to the firm, Siemens Gamesa was the main cause of the 283 million euro negative free cash flow. "They suffered a high cash outflow due to a loss and a build-up of operating net working capital in a seasonal weak quarter," the company stated.

Due to manufacturing errors at Siemens Gamesa, the parent company Siemens Energy experienced a difficult 2023 that resulted in a 4.6 billion euro loss for the fiscal year. Concerns about quality at the wind turbine division are currently being looked at.

Maria Ferraro, chief financial officer of Siemens Energy, told CNBC on Wednesday that the company was happy with the momentum displayed by all of its businesses and the high volume of orders received.

Ferraro stated, "We're going to be looking at all of those quality issues and rectifying them step by step as we continue to work through our Siemens Gamesa quality issues and we saw that this quarter was a stable quarter, so as expected."

In our Siemens Gamesa business, we have a backlog of orders that is around 42 billion, which is also a record. We are ramping up across all of our facilities to truly ensure that we support completing those orders, and around half of that is in our offshore business.

The grid technologies division had a 32.9% increase in orders, totaling 8.24 billion euros, and Ferraro predicted that this trend would continue.

"It is undeniable that every nation is examining ways to advance their energy and environmentally conscious agendas. Our grid technologies division is ideally positioned to reap significant benefits from these initiatives, as demonstrated in the first quarter and hopefully throughout the remainder of our fiscal year," she continued.