Engie raises 2021 guidance with better first-half results
Shrugging off the first-quarter losses in Texas, French energy company Engie announced improved first-half results July 30 as Europe's economy continued its recovery from the effects of COVID-19 and its own operations improved. It also raised its guidance for the year as its asset sales continue.
And although Nord Stream 2 was not mentioned, as one of the five lenders to the project it can also expect to see its loan repayments start this year – if the pipeline flows then as planned.
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First-half Ebitda was €5.4bn, up 23.1% on an organic basis while Ebit was €3.1bn up 44.4% on an organic basis. Of that, half (€1.514bn) came from networks and a sixth (€492mn) came from renewables, down just 1.7% year-on-year despite the losses in Texas. And after a mild H1 202o, the cold winter the following year led to a gain of €284mn for its networks and supply businesses. It has sold a stake in French network operator GRTGaz for a large premium to its regulated value.
Foreign exchange losses amounted to €107mn mainly driven by the depreciation of the Brazilian real and, to a lesser extent, of the US dollar.
CEO Catherine MacGregor said the company had also made progress with its reorganistion, asset sales and development of renewable energy. "For the full year, taking into account the strong performance in H1 and improved expectations for the full year, we are upgrading our guidance for 2021,” she said.
Its Belgian nuclear assets have delivered high levels of availability and the freeze in France and strong power prices are are also expected to contribute to a stronger financial performance than previously anticipated. As a result, Engie now expects profits of €2.5bn-2.7bn – €200mn more than at the time of its Q1 results – based on indicative 2021 Ebitda range of €10.2 -10.6bn and Ebit between €5.5bn and €5.9bn.
Engie expects growth capital expenditure of between €15bn-€16bn in the 2021 to 2023 period and for this capex to be "more evenly phased across this period," with €5bn to be spent this year. It is still aiming for €9bn-€10bn of disposals over the three years, with €2.5bn achievable this year. Engie said it remains committed to a strong investment grade credit-grade rating.