Engie Raises Profit Targets After Posting Bumper Earnings

(Bloomberg) -- Engie SA said profit this year and next will fall less than previously expected after it ramped up investments in electricity assets and slashed costs.

The French utility has been expanding in wind, solar and battery storage. It’s scaling back exposure to fossil fuels as Europe’s energy shift accelerates, even with the pace of the transition in the US thrown into doubt.

The company on Thursday forecast net recurring income of €4.4 billion ($4.6 billion) to €5 billion in 2025, compared with average analyst estimates of €4.33 billion. The shares jumped as much as 6.1% at the open to trade at the highest in more than nine years.

“Electrification will accelerate and renewable energies will continue to experience significant growth,” Engie said in a statement. Future earnings will also be “less exposed to energy prices” thanks to more long-term contracts, while the utility plans further expansion in renewables and networks — possibly including acquisitions in Europe.

Engie reported a 3.1% increase in 2024 profit to €5.5 billion, slightly beating analyst estimates. Beyond a strong contribution from hydro and other renewables assets, it benefited from the end of a windfall tax on nuclear generation in Belgium, and robust results at its network and retail operations.

The utility proposed a dividend of €1.48 a share, in line with policy. It raised the dividend floor price to €1.10 starting this year.

Lower Values

The company booked about €700 million in charges last year, mainly reflecting a drop in the value of several assets currently held for sale. It also reported a provision of more than €100 million on US offshore wind projects, which are subject to delays amid President Donald Trump’s efforts to shrink the sector, Chief Financial Officer Pierre-Francois Riolacci said on a call.

The decline in earnings forecast for this year and next reflects receding power prices, as well as the permanent shutdown of a nuclear reactor in Belgium earlier this month. Two more units there are due to close by the end of the year. 

By mid-March, Engie is due to finalize a partnership with the Belgian government to prolong the lifespan of two other reactors by 10 years, Chief Executive Officer Catherine MacGregor said Thursday. There’s “little chance” of more nuclear units in the country getting an extension, she said.

(Updates with share reaction in third paragraph.)

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