Siemens Q2 profit inches up 6% as high material costs weigh; revenue rises 13%

The Indian arm of German engineering major Siemens reported tepid growth in net profit for the quarter ended March 31, 2022 over the year-ago period even as it saw robust top-line growth and strong addition to orderbook.

Mumbai-listed Siemens Ltd posted a consolidated net profit of Rs 340 crore from continuing operations for the three months ended March 31, compared with Rs 319 crore in the year-ago period.

Revenue for the company, however, rose to Rs 3,954.7 crore from Rs 3,427.7 crore in Q2 FY21.

Siemens follows an October-September financial year.

The company’s share price skid 1.7% to Rs 2,275.35 apiece in a weak Mumbai market on Thursday.

Other key highlights

1) Profits were impact by high material cost that rose 51% to Rs 1079.1 crore YoY

2) Smart infrastructure revenues was up 30% to Rs 1489.5 crore, boosted by the acquisition of C&S Electric early last year; mobility as a segment also sported double digit growth clocking revenues of Rs 295.1 crore compared to Rs 258.9 crore in Q2 FY21

3) Mobility and digital industries were outliers with year-on-year increase in segment profit while all other segments including energy and smart infrastructure seeing a decline in earnings

4) New orders stood at Rs 5,339 crore, registering a 61.4% increase over the same period last year; Order backlog stands at Rs 17,174 crore.

Management Commentary

Sunil Mathur, Managing Director and CEO at Siemens Ltd, said all businesses booked strong growth in order income, reflecting a clear upswing in both public and private capex spending with high value orders being booked in the mobility segment.

“Revenues and profitability have been impacted as a result of global supply chain challenges leading to delays in deliveries and increase in commodity and logistic costs. We expect revenue growth to pick up in subsequent quarters,” he said.