Suez Environnement Profit Stagnates on Weak European Growth

Suez Environnement, Europe’s second-biggest water company, said first-quarter profit remained almost unchanged because of a “particularly difficult” economic environment.

Earnings before interest, tax, depreciation and amortization rose 0.8 percent to 570 million euros ($745 million) from a year earlier, the Paris-based company said today in a statement. Revenue fell 2.6 percent to 3.5 billion euros.

Suez Environnement, which is 34 percent-owned by utility GDF Suez SA, said waste-treatment revenue dropped 5.3 percent as the economic crisis in Europe continued to shrink volumes. The utility, together with larger rival Veolia Environnement SA, has seen demand for industrial waste collection slide after manufacturers reduced factory output.

“We’ve seen a slump in volumes treated as well as a slump in the prices of raw materials in the first quarter,” Chief Financial Officer Jean-Marc Boursier said on a conference call. “The trend hasn’t changed in the first half of April, with volumes still down some 4 percent.”

The decline in waste treatment was offset by revenue growth in the water division, which was up 3.3 percent, Suez said.

Prices of secondary raw materials were down as much as 10 percent during the quarter while “headwinds” continued in the French water business, he said.

Suez kept its 2013 earnings guidance and will propose a dividend of 0.65 euro a share.

The shares rose 1.7 percent to 10.01 euros today in Paris.

(Closes shares in last paragraph.)
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