Frankfurt (Germany) (AFP) – German turbine maker Siemens Energy said Wednesday that its quarterly profits had almost tripled as the firm gains from surging demand for electricity driven by the artificial intelligence boom. The company’s gas turbines are used to generate electricity for data centres that provide computing power for AI and have been in hot demand as US tech giants like OpenAI and Meta rapidly build more of the sites.
Net profit in the group’s fiscal first quarter, to end-December, climbed to 746 million euros ($889 million) from 252 million euros a year earlier. Orders — an indicator of future sales — increased by a third to 17.6 billion euros. The company’s shares rose over five percent in Frankfurt trading, putting the stock up about a quarter since the start of the year and making it the best performer to date in Germany’s blue-chip DAX index.
“Siemens Energy ticked all of the major boxes that investors were looking for with these results,” Morgan Stanley analysts wrote in a note, adding that the company’s gas turbine orders were “exceptionally strong”. US data centre electricity consumption is projected to more than triple by 2035, according to the International Energy Agency, and already accounts for six to eight percent of US electricity use.
Asked about rising orders on an earnings call, Siemens Energy CEO Christian Bruch said he thought the first-quarter figures were not “particularly strong” and that further growth could be expected. “Demand for gas turbines is extremely high,” he said. “We’re talking about 2029 and 2030 for delivery dates.”
Siemens Energy, spun out of the broader Siemens group in 2020, said last week that it would spend $1 billion expanding its US operations, including a new equipment plant in Mississippi as part of wider plans that would create 1,500 jobs. Its shares have increased over tenfold since 2023, when the German government had to provide the firm with credit guarantees after quality problems at its wind-turbine unit.
© 2024 AFP
