Engie hit by the reversal in energy prices in the 3rd quarter but raises its annual objectives

Benefiting from a "context which remains generally favorable on the energy markets", the group has revised its annual recurring net profit objective upwards, now in a range of 5,1 to 5,7 billion euros, compared to 4,7 to 5,3 billion euros announced last summer.

The former GDF Suez recorded an operating profit excluding nuclear activities over the first nine months of the year, up 27,4% year-on-year, to 8 billion euros, thus underlining the good performance of renewables. and its energy supply activities, despite a slowdown observed in the third quarter.

If we include the management of nuclear activities in Belgium, operating profit increased by 14,7% over one year, to 8,32 billion euros.

But the lull in gas and electricity prices is starting to penalize the group's performance, which had recorded a recurring net profit of 5,2 billion euros in 2022, boosted by historic prices, in the context of fears of energy shortages after the outbreak of war in Ukraine.

The operating profit (EBIT) of its largest division, GEMS (Global Energy Management & Sales), dedicated to businesses and large energy consumers (gas, electricity, etc.), was down almost 80% in the third quarter, compared to the same period of 2022, and drops to 200 million euros.

Over the first nine months of the year, the trend remains positive since the operating profit of this division, which supplies energy to these large customers and helps them manage their supply risks, climbs by more than 67%. , at 3,34 billion euros.

But “the reduction in our margins linked to the gradual normalization of the market”, in a context of falling energy prices and less volatility on the markets, “is visible in the third quarter”, underlined Pierre-François Riolacci, deputy general director of finance, with journalists.

Illustrating the general slowdown, Engie's overall turnover over nine months fell by 10,9% compared to the first nine months of 2022, to 61,8 billion euros, which does not prevent the group from approach the end of the year with “confidence”. “Overall performance remains robust,” says Mr. Riolacci.

Record of renewable installations

Engie also says it is reinforced in its strategy of deploying renewable energies, its priority and one of the drivers of its growth. The group had 38,6 gigawatts (GW) of installed capacity as of September 30, he said.

The leading wind and solar energy operator in France and fourth in Europe, Engie recorded an operating profit in this division up 45,3% to 1,51 billion euros, a performance supported "both by the increase in prices captured, by the growth in volumes in Europe, but also by the contribution of newly commissioned capacities in the United States, Europe and Latin America,” explained Mr. Riolacci.

At the end of September, Engie reached a "record" level of renewable installations under construction, brought to 7,6 GW, or 68 projects including 4,6 GW entered into construction over the first nine months of 2023. With projects launched in Brazil , in North America, in India, detailed the group's financial director, which is targeting 4 GW of additional capacity on average each year until 2025.

In the third quarter, Engie also accelerated its battery storage activities - projects intended to compensate for the intermittent characteristics of renewable energies - with the acquisition of the American company Broad Reach Power, specializing in this area.

To green gas, Engie is also advancing its pawns in Europe and plans to invest 3 billion euros in the development of biomethane and synthetic gas (or e-methane). The group, which claims a leading position in France in biomethane, announced in September the acquisition of the British producer Ixora Energy Ltd for 75 million euros.