Recently, General Electric (GE) announced that its board of directors has officially approved the spin-off of its power and wind power business unit GE Vernova for listing. The company will register its shareholders of record on March 19 and the relevant ** will commence trading on April 2.
The listing of the wind power business is part of GE's overall spin-off and restructuring plan. In fact, as early as November 2021, GE launched a spin-off, and said that it would form three industry-leading global listed companies in the future - GE Healthcare, GE Vernova and GE Aerospace, focusing on healthcare, energy and aviation businesses respectively.
According to the plan, GE Healthcare's business will be spun off in early 2023. Merge the renewables, power generation and digital businesses into a single division and complete the spin-off in early 2024; The remaining part was formed into GE Aviation, which covers aircraft engine manufacturing.
Huaxia Energy noted that GE's spin-off work is progressing steadily according to the above plan, and in January 2023, GE Health Care will be officially listed. With the listing of GE Vernova, the wind power division, the overall spin-off of GE is nearing completion.
As for the reason for the spin-off, some analysts believe that it is mainly due to the difficulties in synergy between different business segments after GE's continuous expansion. GE executives said that the spin-off will be more conducive to each sector to focus on its own professional areas and complete a series of strategic decisions such as investment and industrial layout more efficiently.
It is understood that GE Vernova has three main businesses, namely electrification business (including power grid and energy storage), power business (including natural gas, hydropower, nuclear energy and steam technology) and wind power business (including offshore and onshore wind turbines, LM wind turbine design and manufacturing). In 2023, the revenue situation was $6.4 billion in electrification, $17.4 billion in power and $9.9 billion in wind power.
However, the industry is optimistic about the independence of GE Healthcare and GE Aerospace, but only expressed concern about GE Vernova.
The reason for the concern may be related to its market performance in recent years.
Huaxia Energy Network noted that in 2020, GE replaced Vestas in the market share ranking of global OEMs and sat on the "top spot". But the good times didn't last long, and in 2021, it dropped sharply to fifth place. At the same time, with the decline in shipments and hoisting volumes, as well as inflation and chain pressure, GE's wind power sector began to lose money.
In 2022, GE's full-year unit sales fell by another 39%, resulting in a loss of US$2.2 billion in its renewable energy business, which is part of its wind power segment. In 2023, the business will lose $1.4 billion, although it has narrowed, but the situation is still not optimistic.
In addition to the decline in performance, the quality problems of GE's wind power segment are frequent. Not long ago, a blade broke accident at a wind farm in Finland, and the unit and blades were produced by GE. According to incomplete statistics, there have been at least 10 wind power accidents in GE in the past two years.
Although GE Vernova is about to go public, it still faces the long-term challenge of completely solving the decline in profits and quality issues.
*Please indicate the source, article**: Huaxia Energy Network, **hxny3060).