Engie 9M Earnings Flat, Belgium Blamed

Engie said November 7 it no longer expects to achieve its earnings guidance for the full year. As in previous years, the French utility does not report 3Q or 1Q net profits.

It now expects full year 2018 earnings before interest tax depreciation and amortisation (Ebitda) of about €9.2bn ($10.5bn), which it admits  is “slightly below” the €9.3bn-9.7bn indicative range it gave earlier this year – blaming the extended outage at several Belgian nuclear units announced September 2018.

The nuclear power plants’ technical availability of Engie's Belgian subsidiary Electrabel is now expected at only 52% for 2018, whereas in previous years 90% would not be atypical. Engie said the impact on Ebitda of the extended outages, which were ordered by the Belgian nuclear regulator, is minus €0.6bn for 2018.

On the plus side, Engie said it cut net debt to €20.6bn at end-September 2018, a reduction over the previous nine months of €1.9bn, helped by proceeds from the sale of its LNG business to Total. That divestment meant there were few references to gas sales by Engie in its 9M results – once the prime activity of its state-run precursor Gaz de France.

Engie CEO Isabelle Kocher (pictured above, courtesy of the company) said that Engie was “delivering a solid growth since the beginning of the year, apart from nuclear activities in Belgium.” Nine-month Ebitda of €6.5bn however was down by 0.3% year on year on a reported basis, even if Engie said it was up 5% on an ‘organic basis’.

Ebitda was flat because of the negative impact of the divestments of Engie’s Loy Yang B coal-fired power plant in Australia in early 2018 and its UK and Polish thermal power generation businesses in 2017.