GE is bringing its onshore and offshore wind, hydro, grid, and renewable hybrids businesses together in a new, simplified business structure.
The company has announced that it intends to intensify its focus on the growing renewable energy market by consolidating all of the company’s renewable and grid assets.
The proposed moves are part of a broader effort on the part of GE to position the company to meet the evolving needs of the power market, including the growth of renewable energy. This include moving its grid solutions and hybrid renewables (including solar and storage systems) technologies into the GE Renewable Energy Business, complementing its existing onshore wind, offshore wind, LM Wind Power, and hydro offerings; complementing all offerings with digitally enabled services; and streamlining its onshore wind structure.
The company said the proposed move will enable GE Renewable Energy to drive more local and integrated solutions, simplify its structure, and improve performance. The business will be capable of supporting customers from project development, to equipment and services, to full turnkey solutions.
GE chairman and chief executive H Lawrence Culp Jr said, “This strategic realignment positions GE to lead in the fast-growing renewable energy market. This move will help our renewable energy teams better support their customers in leading the energy transition by simplifying the way they can access innovative products, integrated solutions, and services that reflect the evolution of the clean energy marketplace.”
GE Renewable Energy chief executive Jérôme Pécresse said “With the unique diversity and scale of this portfolio and the combination of expertise, technology, and local reach, we will create enhanced value for all our customers seeking to power the world with affordable, reliable green electrons. Our team is excited by the possibilities this new structure creates to help us lead the energy transition for GE.”
The move would seem to secure the company’s renewable energy business as a key part of GE going forward after months of financial turmoil that saw it postpone the release of its Q3 earnings and allow Mr Culp to complete a review of its operations. Mr Culp was parachuted in to replace John Flannery, who had only 14 months in the post.
Announcing results for the quarter ended 31 December 2018, GE reported revenues of US$33.3Bn, cash flows from operating activities of US$6.4Bn, adjusted free cash flows of US$4.9 billion, continuing earnings per share (EPS) of US$0.08 and adjusted EPS of US$0.17. The company said it was taking action to de-leverage its balance sheet, including a reduced quarterly dividend, accelerated sell-down of its stake in BHG.
The renewables business had orders of US$3.9Bn, up 19%, driven by onshore wind orders that were up 9% and services orders up 32% on strong repower units. Revenues of US$3.4Bn were up 28%. However, profit from the renewables segment was adversely affected by price, liquidated damages for execution delays on projects, and higher losses related to the legacy Alstom joint ventures as the company began fully consolidating these entities during the quarter. This was partially offset by cost productivity.
Mr Culp said of GE as a whole, “Our strategy is clear: de-leverage our balance sheet and strengthen our businesses, starting with power. To do this, we are improving execution, customer focus, and how we set priorities across GE. I’m confident in our team, technology, and the global reach of GE’s brand and relationships. We have more work to do, but I’m encouraged by the changes we’re making to strengthen GE and create value for our shareholders, customers, and employees.”
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