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Released August 07, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Siemens AG (Munich, Germany) remains optimistic about its business, with executives predicting a "modest" improvement in orders and revenue in the coming months, despite steep losses for fiscal third-quarter 2020 that included a nearly 50% decline in net profits year-over-year. The company's energy business--which it is preparing to spin off into the independent Siemens Energy AG--took some of the hardest hits from the global pandemic. Industrial Info is tracking more than $5.3 billion worth of projects in the U.S. and Canada that use, or are considering using, Siemens as a contractor and have been delayed or otherwise affected by COVID-19 precautions.
Click on the image at right for a graph detailing U.S. and Canadian projects involving, or potentially involving, Siemens to face COVID-related delays, by industry.
Siemens is among the many oil and gas service providers to see its revenue stream dry up as collapsing demand and commodity prices have made it more difficult for producers to justify new exploration projects. One of the highest-valued individual projects in North America to face delays is Husky Energy Incorporated's (TSX:HSE) (Calgary, Alberta) estimated $2.2 billion West White Rose Project, offshore Newfoundland, for which Siemens is supplying power-generation turbines.
West White Rose is expected to produce up to 75,000 barrels per day (BBL/d) of oil at peak. Husky previously said it was scheduled for completion in 2021, with first oil anticipated in 2022, but both of those events have been pushed back to third-quarter 2022 at the earliest. For more information, see Industrial Info's project report.
The company's Siemens Gamesa renewable-energy business suffered some of the sharpest losses during the second quarter, driven by project delays and cost increases the company attributed to COVID-19, as well as inventory write-downs and higher tax expenses. Three windfarm projects across the U.S. that were set to invest in Siemens turbines are now facing significant construction delays:
Another gas-fired plant project that was considering a Siemens combustion turbine is Kimberly-Clark Corporation's (NYSE:KMB) (Irving, Texas) estimated $150 million natural gas-fired co-generation plant at its paper mill in Chester, Pennsylvania. Although the 1,300-ton-per-day mill has boosted its production of toilet paper and other products that recently have seen a surge in demand, Kimberly-Clark has placed the construction of its specialized power plant on hold, with no new kickoff date yet determined. For more information, see Industrial Info's project report.
Ohio State University was preparing to use Siemens turbines in its proposed, $65 million natural gas combined heat and power plant at its Columbus, Ohio, campus, which had been set to kick off in May but has since been put on hold. The facility is designed to generate 105.5 MW from a pair of combustion turbines, each with a capacity of 33.8 MW, and a 50.5-MW steam turbine. For more information, see Industrial Info's project report.
Despite the turmoil brought on by COVID-19, Siemens executives said in a quarterly earnings-related press release that "major supply constraints [were] successfully avoided."
"While we expect the economic consequences of the COVID-19 pandemic to continue to strongly impact our fiscal fourth quarter financial results, macroeconomic developments and their influence on Siemens still cannot be reliably assessed," the company said in the press release. "We continue to expect a moderate decline in comparable revenue in fiscal year 2020, net of currency translation and portfolio effects, with the book-to-bill ratio remaining above 1." But the company said it projects a "spin-off gain within discontinued operations" following its public listing of Siemens Energy, expected before the end of fiscal 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a graph detailing U.S. and Canadian projects involving, or potentially involving, Siemens to face COVID-related delays, by industry.Siemens is among the many oil and gas service providers to see its revenue stream dry up as collapsing demand and commodity prices have made it more difficult for producers to justify new exploration projects. One of the highest-valued individual projects in North America to face delays is Husky Energy Incorporated's (TSX:HSE) (Calgary, Alberta) estimated $2.2 billion West White Rose Project, offshore Newfoundland, for which Siemens is supplying power-generation turbines.
West White Rose is expected to produce up to 75,000 barrels per day (BBL/d) of oil at peak. Husky previously said it was scheduled for completion in 2021, with first oil anticipated in 2022, but both of those events have been pushed back to third-quarter 2022 at the earliest. For more information, see Industrial Info's project report.
The company's Siemens Gamesa renewable-energy business suffered some of the sharpest losses during the second quarter, driven by project delays and cost increases the company attributed to COVID-19, as well as inventory write-downs and higher tax expenses. Three windfarm projects across the U.S. that were set to invest in Siemens turbines are now facing significant construction delays:
- AES Corporation's (NYSE:AES) (Arlington, Virginia) estimated $288 million Sand Hill Windfarm in Alameda, California, which would generate 144.5 megawatts (MW) from 40 Siemens turbines. First set to begin construction at the end of this year, it will not kick off until third-quarter 2021 at the earliest; see project report
- Algonquin Power & Utilities Corporation's (NYSE:AQN) (Oakville, Ontario) estimated $132 million Broad Mountain Windfarm in Nesquehoning, Pennsylvania, which is designed to generate 80 MW from 21 Siemens turbines. The windfarm had its kickoff date pushed back from last month to October 2021; see project report
- Ørsted US's (Boston, Massachusetts) estimated $660 million Revolution II offshore windfarm near Rhode Island, which is expected to use 38 Siemens turbines to generate 300 MW. Originally set to kick off in October of next year, it will not begin construction until third-quarter 2022 at the earliest; see project report
Another gas-fired plant project that was considering a Siemens combustion turbine is Kimberly-Clark Corporation's (NYSE:KMB) (Irving, Texas) estimated $150 million natural gas-fired co-generation plant at its paper mill in Chester, Pennsylvania. Although the 1,300-ton-per-day mill has boosted its production of toilet paper and other products that recently have seen a surge in demand, Kimberly-Clark has placed the construction of its specialized power plant on hold, with no new kickoff date yet determined. For more information, see Industrial Info's project report.
Ohio State University was preparing to use Siemens turbines in its proposed, $65 million natural gas combined heat and power plant at its Columbus, Ohio, campus, which had been set to kick off in May but has since been put on hold. The facility is designed to generate 105.5 MW from a pair of combustion turbines, each with a capacity of 33.8 MW, and a 50.5-MW steam turbine. For more information, see Industrial Info's project report.
Despite the turmoil brought on by COVID-19, Siemens executives said in a quarterly earnings-related press release that "major supply constraints [were] successfully avoided."
"While we expect the economic consequences of the COVID-19 pandemic to continue to strongly impact our fiscal fourth quarter financial results, macroeconomic developments and their influence on Siemens still cannot be reliably assessed," the company said in the press release. "We continue to expect a moderate decline in comparable revenue in fiscal year 2020, net of currency translation and portfolio effects, with the book-to-bill ratio remaining above 1." But the company said it projects a "spin-off gain within discontinued operations" following its public listing of Siemens Energy, expected before the end of fiscal 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
