GDF Suez Nine-Month Profit Falls on Lower European Power Prices
GDF Suez SA (GSZ), France’s former natural-gas monopoly, reported nine-month profit fell 6.5 percent because of lower power prices in Europe and maintenance halts at power stations in Belgium.
Earnings before interest, taxes, depreciation and amortization fell to 10.3 billion euros ($13.8 billion) on a pro forma basis, the Paris-based company said today in a statement. That was in line with the average estimate of analysts surveyed by Bloomberg.
The Paris-based company maintained its financial targets and said full-year net recurring profit would be at the top end of the forecast range of 3.1 billion euros to 3.5 billion euros for 2013. That’s based on Ebitda of 13 billion euros to 14 billion euros.
GDF Suez, hurt by lower demand for gas-fired power in Europe, is closing plants to contain costs while seeking to expand in Asia, Latin America and the Middle East. Chief Executive Officer Gerard Mestrallet has said the region’s “disastrous” energy policies prompted the utility to shut more than 10,000 megawatts of capacity,
The company today said worsening economic conditions in Europe meant it may be forced to write-down the value of power-station assets.
Net debt fell to 29.8 billion euros compared with 32.2 billion euros as of June 30, the company said.
Longer-than-expected shutdowns of Belgian nuclear reactors for safety checks will cost 318 million euros in Ebitda this year, the utility has said.
At the end of last year GDF Suez reduced earnings targets, citing a “demand crisis” in Europe’s energy markets. In February the utility wrote down the value of its power plants in Europe by 2 billion euros, saying weaker demand, falling emission-permit prices and the cost of gas relative to coal combined to make generation unprofitable.
GDF Suez recorded a further 200 million euros of impairments in the first half after mothballing gas-fired plants.
To contact the reporter on this story: Tara Patel in Paris at email@example.com