By William Horobin and Inti Landauro
PARIS--GDF Suez SA (GSZ.FR) Thursday reported a return to profit
in 2014 but warned that low oil and gas prices will weigh on
profitability this year and the energy company said it expects 2015
profits to be at a similar level to last year.
The return to net profit--2.4 billion euros ($2.72
billion)--comes after the company reported deep losses in 2013 on
write downs on European power plants.
But headwinds will persist in 2015 due to the recent drop in oil
and gas prices, GDF Suez said.
"The recent, considerable fall in oil and gas prices will have a
short-term impact," Chief Executive Gerard Mestrallet said.
To limit the impact on its bottom line, GDF Suez said it will
reduce operating expenditure by around EUR250 million this year and
delay around EUR2 billion in investment in 2015 and 2016. Still,
net recurring income--a measure of net income that strips out
restructuring costs and other impairments--will be between EUR3
billion and EUR3.3 billion this year, compared with EUR3.1 billion
in 2014, and a decline of around EUR0.3 billion from 2013.
GDF Suez already faced a number of challenges in 2014: gas sales
in France fell around 15% due to mild weather; two nuclear reactors
in Belgium were halted; and a drought in Brazil disrupted
hydroelectric operations.
Overall for 2014, revenue fell 6.6% to EUR74.69 billion, below
the EUR78.22 billion average forecast of 24 analysts polled
FactSet. Earnings before interest, tax, depreciation and
amortization in 2014 declined 6.7% to EUR12.14 billion
Write to William Horobin at william.horobin@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires