Siemens reports solid profit, confirms power and gas spin-off

German industrial conglomerate Siemens’ turnover increased by 4 percent to 20.9 billion euros (23.4 billion U.S. dollars) in the second quarter (Q2) of fiscal 2019, the company announced on Wednesday.

“We delivered on our promises again this quarter, and even exceeded expectations in many areas,” commented Chief Executive Office (CEO) Joe Kaeser, adding that the company would now enter into a “new era to become an even stronger and more focused Siemens.”

Siemens is currently planning a large-scale company restructuring and is seeking to spin off its power plant division. It is aiming to create a “new major player on the energy market” with a business volume of 30 billion euros, the company announced on Tuesday.

The restructured company is set to encompass Siemens’ oil and gas business as well as conventional power generation and transmission. In addition, Siemens intends to transfer its majority stake in the renewable energy company Siemens Gamesa Renewable Energy to the new company.

“Being independent will enable us to more effectively leverage our position of strength to further support our customers in rapidly changing energy markets,” commented Lisa Davis, CEO of Siemens’ Gas and Power Division, at the presentation of Siemens’ spin-off plans on Tuesday.

The initial public offering (IPO) of the new company is scheduled to take place by September 2020.

For the rest of fiscal year 2019, Siemens predicts a “continued favorable” market environment with “limited risks related to geopolitical uncertainties.” The company confirmed its business expectations and is anticipating “moderate growth” in revenues.

New orders at Siemens increased by 6 percent to 23.6 billion euros, which was attributable to a “sharp growth” of the company’s Mobility Division. It recorded a “higher volume from large orders.”

The company’s industrial profits rose 7 percent to 2.4 billion euros in Q1. The Digital Factory and Siemens Healthineers Divisions made the largest contribution to the company’s operating profits.

Investors on the stock market reacted positively to the publication of Siemens’ figures. Share prices temporarily increased by over 5 percent and were the clear winner in the German stock index DAX on Wednesday.