Engie Grows, Satisfies Ratings Agencies

French utility giant Engie paid back enough debt in the first half of the year to improve its credit rating, it said July 27. The chief asset sold was the Glow gas- and coal-fired generation business in Asia, which enabled it to repay €3.3bn ($3.9bn). Since 2016 it has announced divestments totalling €16.2bn, of which €12.9bn ($15bn) are completed.

In first half results, it reported net recurring income of €1.5bn, up 11.4% on a reported basis, and 18.9% on an organic basis.

Pre-tax earnings (Ebitda) of €5.1bn were up by 6.2% on an organic basis or 1.3% on a reported basis. CEO Isabelle Kocher said also that organic growth "observed in 2017 is confirmed in the 2018 first half, supported by the continued development in the majority of our activities."

Europe delivered 4.2% growth, thanks to the introduction of gas storage regulation in France January 1, coupled with good performance from its French gas distribution business GRDF; cold weather and the accelerated deployment of gas smart meters were cited as the main reasons.

In the US, gas-fired power helped Ebitda to 9% organic growth or 2% gross growth, to €102mn. In Latin America, organic growth of 8.7% came partly from higher tariffs for gas distribution in Mexico and Argentina. 

Benelux (Belgium, Netherlands, Luxembourg) operations fell 44.9% with the prolonged outages at the Doel 3 and Tihange 3 nuclear power plants and also a reduction in hedged power prices. These impacts were partly offset by higher retail volumes. In France however, where organic growth was 5.3%, retail gas margins were lower. Romanian gas distribution suffered from a drop in volume and price.

The investments program is also finalised with €12.7bn invested in growth since 2016. Engie's 'Lean 2018' performance programme reported, at end-June 2018, €1.1bn of cumulated net gains accretive to Ebitda and has mapped out everything that needs to be done to achieve cost savings of €1.3bn by the end of 2018.