The renewable energy segment of US conglomerate General Electric (NYSE:GE) has turned to a loss of USD 184 million (EUR 165m) in the second quarter of 2019 from a profit of USD 85 million a year back.
This happened even as segment revenues rose 26% year-on-year to USD 3.63 billion. Orders, in turn, climbed 35% to USD 3.7 billion.
GE blamed the negative quarterly result at the renewables segment on higher losses in Grid Solutions equipment and services, Hydro and Offshore Wind, as well as on project execution challenges including higher losses on legacy contracts. During the three-month period, the group finalised the reorganisation of its Grid Solutions equipment and services business into the Renewable Energy segment.
The majority of new orders was in Onshore Wind -- USD 2.4 billion. Organically, orders jumped by 38% because of increased demand for onshore wind equipment in North America, driven by the anticipated expiration of production tax credits (PTCs).
In the first half of the year, GE Renewable Energy booked a loss of USD 371 million on revenues of USD 6.17 billion against a profit of USD 196 million and a top line of USD 5.72 billion a year earlier.
Total backlog at June 30, 2019, amounted to USD 25.7 billion compared to USD 23.3 billion on the same date in 2018.
"Our Renewable Energy business has significant long-term potential, as evidenced by the strong orders growth in the quarter and continued growth of our backlog," commented Jerome Pecresse, president and CEO of GE Renewable Energy. "Looking forward, we see a good level of activity for 2021 projects in the U.S. despite the lower value of production tax incentives," he added.
(USD 1.0 = EUR 0.897)
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