Engie Lifts Payout by 65% as Profit Jumps Amid Energy Crunch

(Bloomberg) -- Engie SA reported a jump in 2022 earnings and a planned 65% increase in its dividend thanks to an exceptional surge in the cost of power and gas last year. 

The French utility is among European energy companies to profit from higher prices in the wake of Russia’s assault on Ukraine. Gas and power markets have since eased, likely curbing results this year, though Engie expects a subsequent bounceback as it capitalizes on investment in renewables. 

“Not only have we achieved robust operational and financial results, but we have also progressed on our strategic roadmap, establishing strong foundations for our group to continue the implementation of the energy transition,” Chief Executive Officer Catherine MacGregor said Tuesday. 

Net recurring income climbed to €5.2 billion ($5.55 billion) in 2022 from €2.9 billion a year earlier, according to a statement. The shares rose as much as 5.8% at the open in Paris, the most in three months.

The bumper earnings of Engie and other European utilities have coincided with a cost-of-living crisis across the continent, sparking the ire of consumers and politicians. Governments have reacted by slapping taxes on windfall profits to help finance relief measures for households and businesses that are struggling with soaring bills.

Such levies, mainly in Belgium and Italy, had an impact of almost €900 million on Engie’s results last year, while existing government profit-sharing mechanisms in Belgium and France shaved a further €1.1 billion off profit.

Earnings Outlook

The company forecast net recurring income of €3.4 billion to €4 billion for this year, in line with analyst estimates of €3.7 billion.

By 2025, Engie sees earnings of €4.1 billion to €4.7 billion as it reaps gains from renewables investment and its Energy Solutions business, which manages infrastructure such as district heating and car-charging networks. 

The firm plans to pay a dividend of €1.40 a share for last year, up from €0.85.

The company also released a separate statement on its energy-transition plans, announcing €22 billion to €25 billion in “growth capex” in 2023-2025, up 50% from 2021-2023. The utility recently completed €11 billion of asset sales.

Engie booked €2.8 billion of impairment charges last year, largely related to increased nuclear provisions for future power-plant dismantling, its coal exit program, and a process to divest power stations mainly in Chile and Morocco.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.