Engie Cuts 2015 Earnings Target on Belgian Nuclear Flaws

Engie, the French energy company formerly known as GDF Suez SA, said a delay in restarting two nuclear reactors because of safety concerns will curb profit this year.

Engie sees net recurring income of 2.85 billion to 3.15 billion euros ($3.5 billion), from a prior forecast of 3 billion to 3.3 billion euros, it said in a statement Wednesday. The shutdowns, extended to November from July previously, will cut 40 million euros a month.

“We have done our work,” Chief Executive Officer Gerard Mestrallet said at an energy forum in Spain. The utility submitted studies on the reactors to the Federal Agency for Nuclear Control and expects a restart Nov. 1, he said.

Engie fell 0.4 percent to 18.185 euros by 11:30 a.m. in Paris.

It has been testing the Doel 3 and Tihange 2 plants in Belgium since flaws in reactor vessels prompted the regulator to order them closed in 2012. Engie restarted the operations for 10 months before halting them again in March 2014.

Ultrasound tests indicated tiny cracks, or what the company calls hydrogen-induced flaws, forcing the utility to prove to the watchdog that the vessels remain strong enough to keep operating. Executives have repeatedly said the structural integrity of the vessels will be proven safe.

The company’s new financial target is based on an estimate of earnings before interest, tax, depreciation and amortization of 11.55 billion to 12.15 billion euros, less than the previous 11.7 billion to 12.3 billion euros, according to Engie.

Sample Tests

Electrabel SA, Engie’s Belgian unit, said Wednesday that more than 1,500 tests on samples are being carried out by 100 people including about 20 international experts.

On May 7 the regulator said in a statement that the safety review process would take “another few months” and integrate results of mechanical tests on samples containing hydrogen flakes after they have been exposed to radiation. The regulator is consulting with an international panel of scientists.

Tihange-2, with a capacity of 1,008 megawatts, and Doel-3, which can produce 1,006 megawatts, represent about 12 percent of Belgium’s total capacity. Doel-3 was commissioned in 1982 and Tihange-2 in 1983, according to Electrabel’s website.

The flaws were formed during construction, Willy De Roovere, former director of the Belgian regulator FANC, said in August 2012. The vessels were made by Rotterdamsche Droogdok Maatschappij NV of the Netherlands.

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