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Siemens Healthineers IPO delayed until 2018

by Thomas Dworetzky, Contributing Reporter | August 04, 2017
Business Affairs
Siemens third quarter included a bit of good news and a bit of bad.

The group made the biggest contribution to the bottom line – a 9 percent boost to $686 million, a 2 percent jump in orders, and in keeping with expectations, according to Reuters.

But other parts of the Siemens empire proved a drag and drove shares down, according to the news agency.

Calling the financials “fully on track for another strong year,” the company detailed in a statement that revenue was up 8 percent from the year-ago quarter, with orders coming in 6 percent lower, “due to sharply lower volume from large orders at Power and Gas and at Siemens Gamesa Renewable Energy.”

Despite certain issues that posed present challenges, Joe Kaeser, president and chief executive officer of Siemens AG, stated that, “our global team delivered a solid quarter with revenue up 8 percent and net income growing by 7 percent. Our digital enterprise business impressively underscored its leading position in the market. We are fully on track with Vision 2020 and for another strong year,"

He did confess on the August 3 conference call, however, that “everything is not perfect at Siemens," especially in reference to the so-called “Crimea affair.”

The affair involved four giant gas turbines sent legally to Russia that wound up illegally in the Crimea – which is under energy-tech sanctions, according to the Washington Post.

In 2014, the EU leveled economic sanctions on Russia due to its “annexation” of Ukraine's Crimean region, noted the paper.

"The Crimea affair has cost us much time and effort,” said Kaeser, adding, “We have to ask ourselves what this means for our future business processes and relationships."

A review of the company's dealings could cost it as much as 200 million euros in sales, according to the CEO, whose contract was today lengthened to 2021.

He called the turbine maneuver “unacceptable” and a contract breach “in criminal fashion.”

But he added that “it would be disproportionate to put an entire country, including loyal and reliable customers, under blanket suspicion.”

The customers he mentioned included the Russian railway system, Novatek and Gazprom.

The future of the Healthineers has been the subject of ongoing debate by investors for some time – ever since news that the intention was to list it broke in November, 2016.

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