Siemens Energy has reported a strong first quarter of the fiscal year, driven by favorable energy market trends.

The company’s order development has been particularly strong in Grid Technologies and Transformation of Industry, resulting in the highest orders in a quarter to date, according to Siemens Energy’s statement on Wednesday.

For the full fiscal year, orders increased by 23.9% year-over-year on a comparable basis, reaching €15.4 billion. The book-to-bill ratio, which measures the ratio of orders to revenue, was slightly above 2, resulting in a record-high order backlog of €118 billion.

“The solid first quarter is encouraging, in part also due to project shifts, which are normal in plant engineering, especially with the market dynamics we are currently seeing,” CEO Christian Bruch said.

“That is why our focus remains on solving the quality problems in our onshore wind business and making the most of the growth potential for the rest of the company,” he added.

Siemens Energy’s profit before special items showed an improvement, reaching a positive €208 million. This is a stark contrast to the previous year’s quarter, which saw a negative result of €282 million due to quality-related charges at Siemens Gamesa.

Special items for the quarter amounted to a positive €1,670 million, driven by a pre-tax gain from the sale of an 18% stake in Siemens Limited, India, amounting to €1,729 million.

Due to the special items, Siemens Energy’s net income for the quarter was €1,582 million ($1.7 billion), a significant improvement from the previous year’s net loss of €598 million. Basic earnings per share (EPS) were also positive at €1.79, compared to the previous year’s negative €0.60.

The company’s free cash flow pre-tax for the quarter was negative at €283 million, primarily due to a high cash outflow from Siemens Gamesa and a build-up of operating net working capital in a seasonal weak quarter.

However, the sale of the stake in Siemens Limited, India, resulted in a cash inflow of nearly €2.1 billion, which is not reflected in the free cash flow pre-tax but contributes to the adjusted net cash.

Looking ahead, Siemens Energy maintains its outlook for fiscal year 2024, expecting comparable revenue growth in the range of 3% to 7% and a profit margin before special items between negative 2% and positive 1%.

The company also anticipates a net income of up to €1 billion, factoring in impacts from disposals and portfolio transformation, alongside a negative free cash flow pre-tax of around €1.0 billion.