Engie Confirms Profit Targets for 2016
April 29 2016 - 2:48AM
Dow Jones News
By Inti Landauro
PARIS--French power utility Engie SA (ENGI.FR) Friday confirmed
its targets for 2016 even as its profitability shrunk in the first
quarter, reflecting low commodity prices and a mild winter in
Western Europe.
The company, which was formerly known as GDF Suez reiterated it
expects a net recurring income--a measure that strips out
restructuring costs and other impairments--will be between 2.4
billion euros ($2.74 billion) and EUR2.7 billion in 2016 compared
with EUR2.6 billion in 2015.
The company reported earnings before interest, taxes,
depreciation and amortization, or Ebitda, fell 1.7% to EUR3.5
billion euros in the three months ended March. Sales over the
period fell 14% to EUR18.9 billion. Analysts expected sales of
about EUR21.14 billion in the first quarter.
The company attributed the revenue decline to lower oil and gas
prices and to the lower demand for gas and electricity in its home
country during the winter because of the warmer weather.
Like most of its peers in Europe, the group has suffered from
sluggish demand for energy in Western Europe, where growth has been
sluggish. At the same time, subsidies for renewable energy have
made traditional power plants less profitable. As a result, the
company had to close down power plants and write down assets worth
billions of dollars over the past years.
The company's management has said it plans to reduce the
company's exposure to energy prices by focusing on services and
regulated businesses in which long-term contracts insure stable
profitability.
Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
April 29, 2016 02:33 ET (06:33 GMT)
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