GDF Suez lowered its annual profit forecast on the back of weakness in European demand and problems at its Belgium nuclear reactors, in results that analysts said lent weight to the group’s internationalisation strategy.
Earnings at the world’s second largest utility in first nine months of the year were hit by the outage of three nuclear plants in Belgium, weak growth in Europe and an unusually warm winter in the region, which lowered demand for gas.
Core earnings fell 15 per cent to €8.9bn while revenue dropped 7.5 per cent to €54.5bn over the period. The group lowered its 2014 forecast for net recurring income from €3.3bn-€3.7bn to €3.1bn-€3.5bn. Shares were fractionally lower in afternoon trading.
The results comes less than a month after Isabelle Kocher, the former chief financial officer, was anointed heir apparent to current chief executive Gérard Mestrallet. She is likely to take over when he steps down in 2016.
A close associate of Mr Mestrallet, she is expected to continue the strategy of shifting the focus of the business outside Europe.
Sofia Savvantidou, analyst at Citi, said: “The results confirm our view that despite the group’s superior internationalisation, trends in Europe [weather, output and prices] remain a key and, unfortunately, negative driver for performance.”
The group has had problems in Belgium this year, which have weighed on earnings, with reactors Doel 3 and Tihange 2 stopped since the end of March due to cracks in their core tanks.
The Doel 4 reactor has been stopped since early August due to turbine damage.
However, Mr Mestrallet said he was confident plants could soon be restarted. “We can anticipate a restart at the end of winter. Our engineers are confident. They are specialists and I hope they are right.”
This comes amid talks with the new Belgium government about a lifetime extension of the Doel 1 and 2 reactors, which came online in 1975 and had been scheduled for shutdown in 2015.
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