August 03:
Shares in the GDF-Suez energy conglomerate, a major player in international gas markets, fell after it reported a jump in six-month net profit but a fall in operating income.
Net profit leapt by 51.2 per cent to 2.6 billion euros ($A3.9 billion), but last year's results were hit by asset writedowns.
Group sales fell by 6.3 per cent to 39.4 billion euros, while recurrent net profit fell by 12.6 per cent to 2.1 billion euros, hit by the depressed market in Europe for the production of electricity, against a background of sluggish economic recovery.
The group said in a statement issued last week that the operating setback reflected a mild winter in the northern hemisphere and the suspension of activity at two nuclear reactors in Belgium.
And although GDF-Suez stood by its outlook for profitability this year, it warned that this would have to reviewed.
Shares fell 1.95 per cent to 18.875 euros in European trading on Thursday, when the French CAC 40 index was down 1.30 per cent.
In common with many energy groups is Europe, GDF Suez has had to make huge asset writedowns in view of turbulence in the market for electricity generation.
This in turn reflects the impact of cheap shale energy in North America which has also pushed down the price of coal, being used increasingly in generate power and making gas-powered facilities less profitable.
The group said it still expected to achieve a net current profit excluding exceptional items of 3.3 billion-3.7 billion euros this year.
But it warned that this outlook would be adjusted to take account of the suspension of activity for security reasons of two nuclear reactors by its subsidiary Electrabel which is the biggest electricity generator in Belgium where it operates seven reactors.
The group said it still intended to invest 6.0 billion-8.0 billion euros this year.
To compensate for a slowing of activity in its traditional and mature markets in western Europe, it intended to become a leader in the transition towards new and renewable energies in Europe, and to become a leading energy provider in countries experiencing robust economic growth and strong demand for energy.
Source: www.businessspectator.com.au/news/2014/8/4/energy-markets/gdf-suez-suffers-operating-setback?
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