German engineering and technology giant Siemens this morning reported a 22pc increase in revenues for 2005 to €22bn. The company said most business divisions reported higher earnings and it is proceeding towards its 2007 targets with new orders up 31pc to €26.7bn.
The company reported profits from operations of €1.4bn, down from €1.5bn a year earlier. The company said profits were offset by €351m worth of severance charges in its information and communications business area. Net income was €813m, compared with €1bn last year.
The company said that net cash from operating and investment activities was a negative €820m, reflecting an increase in working capital. A year ago the company was deeper into the red to the tune of €2bn in terms of net cash due to a massive €1.4bn contribution to the Siemens pension fund.
In terms of the high severance charges, Siemens Business Services (SBS) took €207m in severance charges and posted a substantially higher loss compared to the first quarter a year earlier, and Communications (Com) took €144m in severance charges.
These combined charges offset a gain of €356m at Com from sales of shares in Juniper Networks, Inc. (Juniper). A year earlier, Com recorded a €208m gain in the first quarter from Juniper share sales.
Aside from Com and SBS, Siemens said that all other groups increased their earnings year-over-year except for Power Generation (PG), which sustained an adverse settlement in arbitration. PG nevertheless remained among Siemens’ earnings leaders, along with Automation and Drives (A&D), Medical Solutions (Med), Siemens VDO Automotive (SV) and Osram.
Siemens employs around 800 people in Ireland, including 280 in Cork. The managing director of Siemens Ireland, Lorenz Zimmerman commented: “The first quarter demonstrates that Siemens’ business portfolio delivers strong growth on the combination of innovative solutions, strong presence in growth markets and acquisitions.
“Most groups showed higher earnings, however, net income was affected by severance charges at Com and SBS. With 2006 off to a good start all our measures along with the Product Related Services disposal are directed towards our 2007 targets.”
By John Kennedy
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