Siemens says full-year profit down by 27 percent

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Siemens says full-year profit down by 27 percent
German engineering giant Siemens announced Thursday a 27-percent drop in full-year profits as it lost ground to competitors and was hit by investment costs in its key energy division.

Siemens, which operates its business year from October to September, said in a statement it booked a net profit of 4.59 billion euros ($5.86 billion) in the year ended September 30, down from 6.32 billion euros a year earlier.

Underlying or operating profit fell by 9.0 percent to 9.788 billion euros as new orders were down 10 percent at 76.913 billion euros while revenues rose 7.0 percent to 78.296 billion euros, the statement said.

"A strong fourth quarter enabled us to fulfill our expectations for fiscal 2012," said chief executive Peter Loescher. "Even so, we didn't fully succeed in significantly boosting our performance vis-a-vis competitors, as we did in recent years."

Of the group's four main divisions, only the healthcare sector was able to report an increase in profit. Profit at the energy sector tumbled 47 billion to 2.2 billion euros owing to "costs related to power transmission platforms being installed in the North Sea for wind farms," Siemens said.

Siemens also booked a 327-million-euro charge in the energy division stemming from a credit risk assessment in Iran.

Looking ahead, Siemens said it would launch a programme to cut up to 6.0 billion euros in costs over the next two years and boost its overall profit margin from 9.5 percent in the year just ended to "at least 12 percent by 2014."

For the programme's first year, Siemens was pencilling in "moderate order growth and revenue approaching the level of fiscal 2012," it said.

Operating profit would "come in the range from 4.5-5.0 billion euros."

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