Suez Environnement, Europe’s second- largest water company, more than doubled first-half profit and raised full-year financial targets amid a pickup in industrial waste treatment in Europe.
Net income rose 386 million euros ($510 million) from 175 million euros a year earlier, the Paris-based company said today in a statement. It was estimated to earn 223 million euros, according to the median of nine analysts surveyed by Bloomberg.
Earnings before interest, tax, depreciation and amortization, or Ebitda, rose 9.6 percent to 1.04 billion euros while sales rose 12 percent to 6.6 billion euros.
The utility raised its financial targets for this year to sales growth of at least 7 percent in 2010 to a 9 percent gain in Ebitda, at constant exchange rates. It’s seeking free cash flow of at least 700 million euros and aims to lower costs by 250 million euros in the three years through 2012.
Suez Environnement Chief Executive Officer Jean-Louis Chaussade has said growth in industrial waste treatment this year will also come from Asia and Australia. The company last year shut 14 treatment sites in Europe because of a slowdown and reduced its fleet of vehicles.
Suez Environnement and larger competitor Veolia Environnement SA were among water and waste companies to suffer a drop in earnings in 2009 as the recession forced manufacturers to idle factories, reducing demand for utility services.
Suez Environnement has said it is studying ways to lower its debt ratio after agreeing to buy 75 percent of Spanish water supplier Sociedad General de Aguas de Barcelona SA, or Agbar. The utility announced yesterday it won through Agbar a 50-year water distribution concession for the Spanish city of Calvia.
Net debt was 8.29 billion euros at the end of June, according to the statement. The net debt effect of the purchase will be 1.3 billion euros this year, the company has said as it aims to reduce its debt-to-Ebitda ratio to about 3 times by 2012.
The company was spun off in 2008 by Suez SA in its merger with Gaz de France SA. The combined entity, GDF Suez SA, owns 35 percent of the water utility.