Siemens Energy gives investors $11.5 Billion as the power market booms

S iemens Energy announced on Thursday that it will return up to 10 billion euro ($11.5 billion), to its shareholders by the year 2028, on the backs of booming demand in power infrastructure equipment. This has boosted the company's shares to a new record high.

Siemens Energy announced that up to 6 billion euro would be spent on a share-buyback program, while the remainder will go towards dividends. This announcement was made as part of an event celebrating the U.S. Capital Markets Day. Siemens Energy shares, which raised their mid-term goals last week due to strong global demand for energy grids and gas turbines, rose as much as 8,4%, reaching their highest level since Siemens AG spun off the company in 2020.

At 1448 GMT, they were up 3.9%.

BUYBACK DRIVES SHARES

Christian Bruch, CEO of Siemens, said that the company has been infused with electricity DNA ever since Werner von Siemens founded the business empire in the 19th century.

Bruch said, "We're convinced that the electric and electrification market provides us with ample opportunities to grow our company profitably."

Analysts at Citi stated that a "strong buyback" could help re-rate the shares relative to GE Vernova. GE Vernova is Siemens Energy's biggest rival, trading at a 50-times price-to earnings ratio, compared to Siemens Energy at 30 times.

Siemens Energy, which is the second largest market in Europe after North America where it generates around a quarter revenue, has attributed a part of this difference to higher multiples.

Around 6 billion euro will be invested by 2028 to meet the surge in demand for electricity infrastructure. This is partly due to the growing need for AI data centres. A third of this will go towards transformer and switchgear factories.

GE Vernova announced a year earlier that it would invest $9 billion by 2028.

(source: Reuters)