Veolia Threatens to Withhold Winter Heat From French Late Payers
Veolia Environnement SA (VIE) threatened to withhold winter heating from French customers who fail to settle payments on time after saying some including towns, schools and social housing are late handing over money for heat and water.
“If they don’t pay, we can delay when we turn the heat back on,” Chief Financial Officer Pierre-Francois Riolacci said today on a conference call. “We have experienced that in the past and I can tell you when the cold comes in October, if it’s not paid, we just don’t start the operation and within a week you usually get the money.”
Municipalities and schools are “taking their time to pay,” Riolacci said.
Veolia’s net income was almost wiped out in the first half because of impairments on waste-handling services in Germany, slowing volumes and more competition for municipal contracts, the biggest European water and waste utility reported today. It earned about 41 percent of its revenue in France last year.
Towns delayed paying for water works by holding up the date when they recognize they’ve been completed, Riolacci said.
“Some customers are taking their time recognizing the completion of works,” he said. “They aren’t late payers for bills, just trying to delay the timing of our ability to bill.” More recently customers of its Dalkia energy-services unit are paying bills late, pressuring Veolia’s cash position, he said.
“Things will get back to normal in the second half with the advent of winter,” said Chief Executive Officer Antoine Frerot. Payment problems are happening in a “small part” of the utility’s business, he said on the conference call. Veolia is boosting reliance on industrial deals and growing economies such as China to counter weaker European demand, Frerot said.
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