AI data centres, Middle East demand drive record quarter at Siemens Energy

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Aug 5 (Reuters) - Siemens Energy reported record third-quarter sales, margins and orders on Wednesday, driven by demand for gas turbines from expanding AI data centres in the United States and power plant projects in the Middle East.

Those trends, along with governments increasingly turning to gas to cut emissions, have fuelled demand for power plants and related equipment in what some industry executives have described as a "super cycle".

"We're at the start of ... this major wave of electrification. And we're seeing the share of electricity in total energy demand rise steadily," Siemens Energy CEO Christian Bruch said.

"And that, of course, is driving demand for our products," he added, noting that data centre operators and Middle East customers accounted for about half of third-quarter gas turbine orders.

AI DATA CENTRES BOOST GAS TURBINE DEMAND

Alongside U.S. rival GE Vernova, Siemens Energy's shares have risen nearly sevenfold over the past two years, helped by soaring demand for turbines and grid equipment used to power data centres needed for AI.

Its struggling Siemens Gamesa division, long a drag on group performance, also posted its first quarterly operating profit in almost four years, helped by cost cuts and higher capacity utilisation.

Shares in Siemens Energy, which makes products ranging from gas and wind turbines to converter stations and electrolysers, were up 1.1% at 0835 GMT.

"I am very pleased with the strong results. In particular, the upturn in gas service orders has been a pleasant surprise and reinforces the long-term growth outlook," said Jasmin Wolfram of Siemens Energy shareholder Union Investment.

Third-quarter sales rose 18.5% to €11.45 billion ($13.20 billion), beating a company-compiled analyst forecast of €11.22 billion. Profit before special items more than tripled to €1.62 billion, also ahead of the €1.38 billion consensus estimate.

Siemens Energy now expects to hit the upper end of its 10-12% margin target for 2026.

In addition to data centre expansion, the Iran war has boosted demand for power equipment among Middle East governments seeking to strengthen energy security as the conflict highlights the vulnerability of infrastructure.

GE Vernova also pointed to data centre-related orders as the main driver of quarterly results last month, though losses at its wind business weighed on performance.

($1 = 0.8672 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff. Editing by Friederike Heine, Varun H K and Mark Potter)