Cold Winter Favours Engie's 1Q

Engie has confirmed its previous 2018 results guidance, after issuing 1Q earnings in line with its expectations.

The French utility does not report 1Q or 3Q net profits. But May 15 it reported 1Q2018 pre-tax earnings (Ebitda) up 3% higher year on year at €3.2bn ($3.8bn), helped by higher gas sales this winter in Europe. Commissioning of new assets in Latin America, and of renewable generation units in France and Belgium also helped. Actual sales quantities were not reported; these will normally appear in 1H results.

Of its target of €15bn asset divestments during 2016-18, Engie said that €11.6bn were completed and a further €1.6bn were signed and pending; the programme has lowered its exposure to coal, merchant power, and upstream interests. Some proceeds helped to pay down net debt, which was €19.4bn at end-March 2018, down €3.1bn from three months earlier.

Engie said it had restated 2017 figures to classify its E&P as discontinued operations as from May 2017, and LNG midstream/upstream as discontinued as from March 2018. Its $4.7bn E&P sale to UK firm Neptune was completed in February 2018, while a $1.49bn deal to sell Engie's LNG assets, agreed with Total in November 2017, is still expected to complete around mid-2018.

Engie welcomes new chairman Jean-Pierre Clamadieu on May 18 whose political antennae will be required as it and four western European partners consider how to handle a wide-ranging legal challenge from Poland's anti-trust regulator  over their financial backing for Gazprom's Nord Stream 2 project.