General Electric renewables unit has continued to report increasing losses of $419 million for the second quarter of 2022 ending June 30, 2022, compared with a loss of $99 million in the same quarter in 2021.
For the first half of 2022 the renewable business reported a loss of $853 million compared with a loss of $333 million in the first half of 2021.
Revenues and orders in GE’s renewables business were also down in the second quarter of 2022. Company no longer expects a step-up in profit in the segment in H2 due to “additional US onshore demand pressure”.
The unit reported revenues of $3 billion for the second quarter, compared with $4 billion for the same period in 2021, while orders for the second quarter in 2022 were $3.1 billion compared with $3.2 billion in the same period in 2021.
The 3 per cent decrease in orders was due to continued pressure in the onshore wind equipment market reflecting lower US volume resulting from the PTC expiration, as well as the business’ international selectivity strategy, GE said.
This decline was partially offset by growth at the grid and hydro segments. The 23 per cent reported revenue decrease was due to lower North America deliveries in the onshore wind business.
No Step-up Profit Anticipated
In 2022, GE no longer expects a step-up in profit in renewable energy in the second half due to “additional US onshore demand pressure, inflation, and fleet durability actions”.
Renewable energy is taking swift action to turn around this business, General Electric said. Given its “strong portfolio and fundamental importance” in the energy transition, GE said it is confident in the business’ ability to drive profitability over time.
During the quarter, GE introduced its newest onshore 3-3.4MW wind turbine platform designed specifically for the North American region.
GE’s portfolio of energy businesses, including GE Renewable Energy, GE Power, GE Digital, and GE Energy Financial Services are to come together under the GE Vernova brand name.
GE continues to trend toward the low end of its 2022 outlook on all metrics except cash. Working capital is expected to remain pressured as it protect customers from the impact of supply-chain challenges as well as timing of Renewable Energy-related orders.
Reporting GE’s second-quarter results, Chairman and CEO of GE and CEO of GE Aerospace Larry Culp said:
“The GE team delivered a strong quarter, with growth in orders, revenue, and profit, as well as positive free cash flow.”
Larry Cusp
Turning to 2023, Culp shared that GE is “just starting our annual strategy and budget planning cycle for 2023. We still expect to deliver significant year-over-year improvement in both profit and cash, but below our prior view.”
With the world evolving so quickly, Culp said the company has to see how the next six months unfold. GE expects to provide its 2023 outlook in the usual timeframe at its fourth-quarter earnings.
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