Engie Remains Mired in Red Ink on Energy Plant Write-Downs--Update
March 02 2017 - 2:18AM
Dow Jones News
By Inti Landauro
PARIS--French energy utility Engie (ENGI.FR) remained mired in
red ink last year on another hefty write-down of the value of its
conventional power plants, struggling with low electricity prices
across Europe, and provisions for its Belgian nuclear
facilities.
The company, formerly known as GDF Suez, said posted a net loss
of 400 million euros ($421.3 million), though that was smaller than
the EUR4.6 billion recorded the previous year.
Engie's net recurring income--a measure that strips out
restructuring costs and other impairments--fell slightly to EUR2.5
billion from EUR2.6 billion thought the figure was in line with
management's target set for the year
The company booked impairments worth EUR3.7 billion during the
year, partly offset by capital gains made on the sale of assets.
The impairments also include higher provisions for its nuclear
plants in Belgium.
The weight of write-downs on Engie's balance sheet for another
year shows how sluggish demand for energy and subsidies for
renewable energy has hit European utilities hard by making
traditional power plants unprofitable. The company has written down
a massive $30 billion worth of assets over the past four years.
The company confirmed that it would keep its dividend at EUR1 a
share this year and next and then lower it to EUR0.70 a share
thereafter.
In reaction to the tough market conditions, Engie's Chief
Executive Isabelle Kocher has decided to get rid of some of its
assets exposed to commodity prices and energy markets and plans
instead to focus on businesses with regulated prices, on services
and on renewables.
The company has said last year it planned to sell assets worth
EUR15 billion and invest EUR22 billion between 2016 and 2018 to
bring its share of earnings before interest, taxes, depreciation
and amortization from contracted and regulated activities to 85%
from 50% at the end of 2015.
After selling many thermal power plants, mainly coal-fired ones,
Engie has brought the proportion of its assets made up of
regulated, services and renewables businesses to 75% at the end of
2016.
The company said last year's revenue fell 4.7% to EUR66.6
billion, while Ebitda fell 5.2% to EUR10.7 billion.
A group of analysts polled by FactSet expected an average net
profit of EUR2.42 billion on sales of EUR65.99 billion and Ebidta
of EUR10.77 billion.
-Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
March 02, 2017 03:03 ET (08:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Engie (EU:ENGI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Engie (EU:ENGI)
Historical Stock Chart
From Apr 2023 to Apr 2024
