Engie Lifts Profit Outlook on Cost Cuts, Currency Effects

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Or sign-in if you have an account.(Bloomberg) — French utility Engie SA raised its full-year profit forecast as it benefits from currency fluctuations, its huge acquisition in the UK, cost cuts and energy market volatility linked to the war in the Middle East, which helped mitigate a profit decline in the first six months of the year. 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It fell to €3 billion in the first half from €3.1 billion a year earlier, caused by lower French gas demand and the shutdown of nuclear reactors in Belgium. The improved guidance is due to the earlier-than-expected completion of the UK Power Networks acquisition, currency fluctuations, “a bit of volatility in market prices, and a performance plan that’s delivering beyond our expectation,” Chief Executive Officer Catherine MacGregor said on a conference call.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againEngie and other European utilities are betting on an expected increase in power demand driven by the artificial intelligence boom and electric cars by investing in wind, solar, battery storage and power networks. It bought a leading UK power-distribution network for £15.8 billion ($21 billion) including debt in May to counterbalance its exposure to French gas assets, which may suffer from a shift away from fossil fuels.Engie has also been cutting costs to help counter a loss of earnings from Belgium, where three of its five reactors in the country were closed last year. The firm is now in talks to sell its entire Belgian nuclear business to the state to eliminate risks related to energy policy changes and focus on assets with more predictable income and expenses.So-called performance effects, which include cost cuts and other efficiency gains, were more than €100 million above the company’s expectations in the first half, Chief Financial Officer Pierre-Francois Riolacci said Friday. The company also had a better-than-expected gas trading profit, although increased market volatility contributed “very little” to the improved earnings guidance.Earnings of the company’s energy management unit, which hosts its trading activities, were partly mitigated by more challenging conditions in power markets, the company said. (Updates from first paragraph with details on improved guidance, CFO comment.)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.