By Inti Landauro 
 

PARIS--French power utility Engie SA (ENGI.FR) Thursday confirmed its targets for 2016 after its net profit rose, boosted by gains made on hedging contracts related to electricity and gas purchases and a gain made on the partial sale of a unit in Chile.

The company, which was formerly known as GDF Suez, said its net profit in the first half of the year rose 11% to 1.2 billion euros ($1.33 billion), while revenue over the period fell 13% to EUR33.5 billion. Analysts expected a net profit of EUR1.4 billion out of revenue of about EUR38.7 billion in the first half.

The company attributed the revenue decline to lower oil and gas prices and retail electricity prices. A mild winter in France and Western Europe also hurt energy demand in the first three months of the year.

Like many 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 ensure stable profitability.

Engie will 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.

Write to Inti Landauro at inti.landauro@wsj.com

(END) Dow Jones Newswires

July 28, 2016 13:03 ET (17:03 GMT)