Siemens Q1 net profit declines 15% but revenue rises 21%

The Indian arm of German engineering major Siemens AG reported a lower profit for the quarter ended December 31, 2021 but saw robust top line growth and strong new addition to order book.

Mumbai-listed Siemens Ltd posted a net profit of Rs 250.7 crore for the three months ended December 31, down from Rs 295.5 crore in the year-ago period, as higher commodity prices and lower forex gains hurt the bottom line.

Revenue for the company, however, rose to Rs 3,550.4 crore from Rs 2,925.2 crore in Q1 FY21. Revenue from continuing operations, at Rs 3,197 crore, was up 11.8% over the same quarter in the preceding year.

Siemens follows an October-September financial year.

The company’s share price skid 0.7% to Rs 2,422.1 apiece in a weak Mumbai market on Friday.

Other key highlights

1) Profit was impact by high material cost that rose almost 64% to Rs 743.9 crore YoY.

2) Smart infrastructure segment’s revenue was up almost 50% to Rs 1,287 crore, boosted by the acquisition of C&S Electric last year.

3) Mobility segment sported high growth, clocking revenue of Rs 300.7 crore versus Rs 210.5 crore in Q1 FY21.

4) Mobility was an outlier with year-on-year increase in segment profit while all other segments—energy, smart infrastructure and digital industries—saw decline in earnings.

5)  New orders from continuing operations stood at Rs 5,300 crore, a 65.3% increase over the same period last year; order backlog stands at Rs 15,575 crore

Management commentary

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Ltd, said all businesses demonstrated very strong growth.

He said new orders booked in the quarter included approximately Rs 900 crore booked for the electrical and mechanical system works of the Pune Metro Rail Line 3 corridor from Hinjewadi to Shivajinagar. The company is executing this order as part of a consortium, together with Siemens AG, Siemens Mobility GmbH and Alstom Transport India Limited.

“While revenues were marginally impacted due to delays in offtake by customers on account of COVID-19 and supply chain challenges resulting from global shortage of semiconductors, profit was impacted due to continuing increases in commodity prices and lower forex gains than in the previous year,” Mathur said.

“However, we continue to be cautiously optimistic about the increase in demand across all our businesses,” he added.