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UPDATE 1-Siemens ousts Power Transmission chief after profit hit
April 24, 2012 / 2:45 PM / 5 years ago

UPDATE 1-Siemens ousts Power Transmission chief after profit hit

* Names new head of Power Transmission

* Says Karlheinz Springer to replace Udo Niehage

* Says Springer to take over on May 1

* Move comes after major charges at Power Transmission

* Shares up 1.2 percent vs DAX index up 0.9 percent (Adds details, background)

By Maria Sheahan

FRANKFURT, April 24 (Reuters) - German engineering conglomerate Siemens AG ousted the chief of its Power Transmission business, which has been hit with costly delays to offshore wind projects.

Germany’s biggest company by market capitalisation said on Tuesday Karlheinz Springer, 54, would replace Udo Niehage as the unit’s chief executive on May 1.

The move was expected following reports last week that Siemens was set to slash its full-year outlook when it publishes its second-quarter results on Wednesday, due to one-off charges related to the delayed wind projects.

The German offshore wind power market is expected to grow rapidly in coming years as the government banks on wind farms to help it shift its energy mix toward renewables and away from nuclear power.

But Siemens, which sees itself at the forefront of Germany’s push for greener energy, has struggled to make money in the offshore wind business, as low prices for wind turbines weigh on its Renewable Energy business and complicated German approval processes hurt the Power Transmission unit.

The unit, which won several contracts to connect offshore wind farms with mainland power grids, was hit with 203 million euros ($266.4 million) of charges for delayed projects in its fiscal first quarter, and a German newspaper said there was more pain to come in the second quarter.

Siemens has downplayed the problems it is having at its Renewable Energy and Power Transmission businesses, blaming the growing pains of a new technology and Germany’s complex regulatory environment. Still, its finance chief Joe Kaeser recently said he expected the problems to persist for a while.

According to a Reuters poll, analysts on average see Siemens posting adjusted net income from continuing operations of 5.2 billion euros, compared with its outlook for 6 billion, partly due to the one-off charges.

Power Transmission’s outgoing CEO Niehage will head the Siemens Berlin Liaison Office and advocate new energy policies to politicians and industry associations, Siemens said.

Siemens shares were up 1.2 percent at 69.73 euros by 1436 GMT while the blue chip DAX index was up 0.9 percent. ($1 = 0.7619 euros) (Editing by David Holmes)

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