(Reuters) -GE Vernova said on Tuesday it has resumed installation of turbines at two offshore wind farms that suffered equipment failures this year, but the company’s chief executive said he was cautious about the prospects for the struggling sector.
In a presentation to investors in New York, GE Vernova CEO Scott Strazik said the company is still not taking new orders for offshore wind turbines and predicts more losses in its wind segment by 2025.
“We’re not going to chase bad deals,” he said on stage, adding that the energy equipment maker expected little to no growth in onshore wind power over the next three years.
GE Vernova’s wind division has lost hundreds of millions of dollars this year due to delays at major offshore projects in the United States and Britain due to accidents involving its turbines.
Complete construction of the Vineyard Wind project off the coast of Massachusetts was halted for months due to a major blade failure. A company investigation found that workers at a turbine blade factory in Quebec skimped on quality control.
The broader offshore segment has also struggled with cost inflation and supply chain challenges, and Strazik said the company was seeing increased customer interest in its software offering for nuclear and electrical networks.
GE Vernova became an independent company this year after a three-way split from General Electric. Strazik said the company is focused on reducing costs and improving profitability.
The company expects sales to decline by a mid-single digits in 2025, compared with forecasts that sales will be flat this year, the company said in a statement ahead of a meeting with investors in New York.
Weakness in the wind segment was offset by strong demand for GE Vernova’s gas turbines and power grid equipment to meet the rising energy needs of data centers.
“I can’t think of a time when the gas industry has had more fun than right now,” Strazik said.
The company expects to receive 20 gigawatts of gas equipment orders this year, up from 11 GW last year, he said. By 2027, the company will produce 80 gas turbines per year, up from 55 currently.
The company expects higher revenues of between $36 billion and $37 billion for next year, up from the expected upper limit of $34 billion to $35 billion in 2024.
It also sees free cash flow rising to between $2 billion and $2.5 billion in 2025, up from the higher end of $1.3 billion to $1.7 billion for this year.
The company also authorized a $6 billion share buyback and a new quarterly dividend of 25 cents per share.
(Reporting by Seher Dareen in Bengaluru; Editing by Alan Barona and Michael Perry)
