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Engie 9-month EBITDA Edges Lower, Revenues Rise - Quick Facts

Engie, formerly called GDF Suez, (GDSZF.PK, GDFZY.PK), a natural gas and electricity supplier, reported that for the nine months ended September 30, 2018 its EBITDA, a key earnings metric, declined 0.3 percent from the year-ago period to 6.5 billion euros. However, EBITDA rose 5.0 percent on an organic basis.

Reported EBITDA growth for the latest period included an adverse exchange rate effect, notably due to the depreciation of the Brazilian real and U.S. dollar against the euro.

It also included a negative scope effect stemming chiefly from the sale of the Loy Yang B coal-fired power plant in Australia in early 2018, and of the thermal power generation business in the United Kingdom and Poland in 2017.

The organic EBITDA growth for the period was mainly driven by the good performance from the energy management activities, due to favorable market conditions in Europe and to the impact of the change of management set up for some of GEM or Global Energy Management Business Unit's long-term contracts, by revenue-related developments and by the impacts of the Lean 2018 performance program.

Current operating income for the nine months was 3.5 billion euros, stable on a reported basis and up 7.7 percent on an organic basis.

Revenues for the nine months rose 0.4 percent to 43.0 billion euros from 42.9 billion euros in the same period last year. Revenues grew 1.0 percent on an organic basis.

Reported revenue growth was affected by an adverse exchange rate against the euro on almost all foreign currencies, offset by an overall positive scope effect.

Organic revenue growth was mainly driven by a sharp increase in renewable power generation, mainly hydro power, in France and Brazil, and by the introduction of gas storage regulation in France. These positive effects were partly offset in particular by the lower contribution of nuclear activities in Belgium.

Looking ahead, the Group confirmed its 2018 financial targets for net recurring income Group share to be between 2.45 billion and 2.65 billion euros, but expected at the low end of the range.

The target is based on an estimated EBITDA slightly below the 9.3 billion and 9.7 billion euros indicative range communicated to the market on March 8, 2018.

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