Thursday, 9 February 2012 at 13:59, Bloomberg
GDF Suez agreed in June to sell its gas distribution network in Italy for €772 million. (REUTERS)
GDF Suez SA, operator of Europe’s biggest natural-gas network, posted a 13 per cent drop in profit because of “unfavorable” weather conditions and a rate freeze.
Net income of €4 billion ($5.32bn) in 2011 compared with €4.62bn the previous year, the Paris- based utility said today in a statement. That missed the €4.5bn average estimate of 10 analysts surveyed by Bloomberg.
The utility is targeting recurring net income of €3.5bn to €4bn in 2012, based on earnings before interest, tax, depreciation and amortisation of €17bn. Guidance given last year was for Ebitda to accelerate to more than €20bn in 2013.
This year will be marked by “economic uncertainty,” Chief Executive Officer Gerard Mestrallet said on a conference call. “We are looking at a stable picture for 2012.”
GDF fell as much as 3.4 per cent in Paris trading and was at €21.02 as of 9:02am local time. The stock is down 29 per cent in the past year.
The former French gas monopoly is planning to cut the proportion of earnings from Europe amid the debt crisis and uncertainty about regulated tariffs at home and Belgian nuclear taxes. GDF Suez wants to double sales of liquefied natural gas to emerging markets by 2020 in a push into fast-growing economies. Mestrallet has warned that changing European regulation will dissuade utilities from investing.
Ebitda rose 9.5 per cent to €16.5bn compared with an average estimate of €16.4bn. The utility said this measure of profit fell by €500m because of lower gas demand and the rate freeze.
The company said it will at least match the 2011 dividend of €1.50 a share this year. It expects a net recurring income group share of around €5bn by 2015.
GDF Suez had forecast Ebitda would rise to €17bn to €17.5bn in 2011, before the impact of French weather and regulated rates. It had also planned to invest €11bn to €12bn annually and sell assets worth €10bn through 2013.
The utility’s results “suffered” from the mild weather in Europe last year, Mestrallet said on BFM radio today. The region is currently in the midst of a cold spell that pushed French demand for natural gas to a record yesterday.
GDF Suez had said it would make a loss on sales of natural gas to French households in the fourth quarter because of a price freeze imposed by the government that meant it didn’t cover the costs of supply.
The utility sold a 30 per cent stake in its exploration and production unit to China Investment Corp for €2.3bn to cut debt and capitalise on higher demand for energy in Asia.
The company agreed in June to sell its gas distribution network in Italy for €772 million and also sold a stake in French distribution network GRTgaz for €1.1bn. Last year, it acquired a 70 per cent stake in London-based International Power Plc.
GDF Suez, which was created in the 2008 merger of Gaz de France SA and Suez SA, has said it would like to develop a 1,000-megawatt reactor in the Rhone Valley that would serve as a showcase for exports. It also plans to bid with Areva SA and Vinci SA for as much as 1,750 megawatts of offshore wind power capacity.
Your comments