Munich - Massive restructuring costs and efforts to root out corruption combined to drive German engineering giant Siemens into the red during the final quarter of the 2007-08 business year.

The company posted a net loss of 2.4 billion euros (3 billion dollars), a sharp fall from a year ago when the loss was 74 million euros, Siemens said Thursday.

Turnover in the three months to the end of September 2008 increased 7 per cent to 21.7 billion euros, while orders were up 4 per cent at 22.2 billion euros, the company said.

For the full business year, Siemens posted a profit of 5.9 billion euros, largely as a result of revenue from the sale of auto parts supplier VDO. Turnover was up 7 per cent to
77.3 billion euros.

In the final quarter, Siemens said it was forced to set aside 4 billion euros to cover the costs of restructuring and penalties arising from the scandal over bribes paid to officials to win contracts abroad.

The company is alleged to have made 1.3 billion euros in unauthorized payments between 2000 and 2006 in what has become the biggest bribery scandal in German corporate history.

Last week, the company said it had set aside 1 billion dollars to settle US and German charges related to bribes.

Analysts estimate the total bill for Siemens might be 2.5 billion euros, including penalties, fines, consultancy fees and the skimming- off of excessive profits.

Former chief executive Klaus Kleinfeld left after the scandal broke and was replaced in 2007 by Peter Loescher, who has vowed to clean up the company's affairs.

Loescher has streamlined the company into three sectors covering energy, industry and health services, slashing 17,000 jobs in its global workforce of 427,000.

"Coming out of our transition year in fiscal 2008, we confront new challenges," Loescher said. From our position of relative strength we intend to win market share profitably."

Despite what he called "macroeconomic adversity," Loescher said Siemens confirmed its growth target for the new financial year.

"It has become clearly more ambitious to reach our income guidance for fiscal 2009. But we stick to it," he said. "As to the effects of the financial crisis on the real economy, we will assess them quarter by quarter."

Siemens shares climbed 3.7 per cent to 41.48 euros on the Frankfurt stock exchange after the figures were announced. (dpa)