General Electric said it was tracking the impact of coronavirus on demand and supply chains on a daily basis, as the US giant confirmed its GE Renewable Energy unit has seen both affected, and flagged a potential $200m-300m profit hit across its industrial businesses in the first quarter.
GE Renewable Energy has seen some effect on commercial demand in China, according to material released for a GE investor update today, and cited mitigating Covid-19’s impact on its global supply chain as one of the four key points shaping the renewables unit’s outlook in 2020.
GE said it is too early to assess the impact of coronavirus – which it described as an “evolving variable” on its full-year – but guided for a negative impact of $300m-500m on free cash flow and $200m-300m on operating profit in the first quarter across its industrial businesses – Healthcare, Power, Renewable Energy and Aviation.
Like fellow Western wind OEM giants Vestas and Siemens Gamesa, GE Renewable Energy has significant manufacturing operations in China, where it last year secured record orders. The wider Chinese industrial base is also a major supplier to the global wind industry.
GE said it was “tracking demand & supply chain impacts daily” from the outbreak, which has gathered pace around the world over the last few weeks.
GE Renewable Energy CEO Jérôme Pécresse told a conference call to discuss the investor update: “As of today we are on track to our quarterly forecasts. We continue the positive recovery of our supply chain in China”.
Group CEO Larry Culp said: “This has become a global issue,” but said all but two of the group's facilities in China have now resumed operations, albeit at reduced capacity.
