Siemens profit up by a quarter

Siemens released figures for its 2014 fiscal year ending September on Thursday, showing a net profit of 5.5 billion euros ($6.8 billion), up 25 percent from the previous year.

However, sales were 2 percent lower, Siemens announced, coming in at 78.35 billion euros. The net profit was primarily achieved through cost savings and one-off effects, including the sale of its hearing aid unit. Siemens said the unit was acquired by private equity firm EQT and Germany's Strüngmann family for 2.15 billion euros.

"We delivered the results we originally promised for fiscal 2014 and made substantial progress in strengthening our portfolio," Siemens Chief Executive Joe Kaeser said in a statement.

Kaeser also announced that he would propose to the company's board a hike in the dividend of 10 percent, paying out 3.30 euros per share to investors.

Restructuring drive

For the 2015 fiscal year, Siemens expects a "complex business environment due to geopolitical tensions." Therefore, revenue was likely to "remain flat," Siemens said.

The Munich-based company, however, is targeting an increase in profit margins to between 10 percent and 11 percent in an effort to close a profitability gap with global rivals. Siemens competitor ABB from Switzerland, for example, boasts an operating margin of 14.3 percent, and US engineering giant General Electric earns 16.3 percent on average from its products.

Siemens CEO Joe Kaeser, who took over in 2013, also aims to fix or dispose of underperforming businesses such as baggage-handling and transmission systems. Problems have also emerged in its wind energy division where faulty turbines forced the company to accept a charge of 223 million euros, pushing it into a loss in the final quarter of fiscal 2014.

He also said there would be "structural adjustments as markets change," meaning that some divisions will face further job losses.

uhe/ng (dpa, AFP, Reuters)