Engie Shares Rise After Earnings Beat Estimates

By Nina Kienle and Christian Moess Laursen

Shares in French utility Engie rose after the company logged higher-than-expected earnings and raised its full-year outlook.

At 0819 GMT, shares were up 3.1% at EUR14.96, in a session of broad-based losses across European stocks. The French index CAC 40 is down 0.7%.

The company, one of Europe's largest energy utilities, on Friday posted a swing to net profit of 1.94 billion euros ($2.09 billion) in the first half from a net loss of EUR847 million in the same period the prior year. Revenue fell 20% to EUR37.52 billion.

Results were supported by strong contributions from Engie's renewables and flexible-generation segments, offsetting a 38% slump in earnings from the global energy management and sales business--Engie's main profit center.

This drove earnings before interest and taxes of EUR6.39 billion, down from EUR6.95 billion, but well-ahead of a market consensus of EUR4.86 billion, according to a Visible Alpha poll.

The half-year financial result as well as lower-than-expected recurring financial costs led the multinational utility to lift its outlook for the year.

It now expects a recurring net income in the range of EUR5.0 billion to EUR5.6 billion and non-nuclear EBIT ranging between EUR8.2 billion and EUR9.2 billion.

Engie's performance looks strong and the guidance raise should have a positive impact on dividends, Citi analysts wrote in a research note.

The Paris-based group reaffirmed its dividend policy, with a 65% to 75% payout ratio based on net recurring income. Based on the guidance, this implies a dividend-per-share range of EUR1.3-EUR1.7, Citi said.

Earnings before interest, taxes, depreciation and amortization amounted to EUR8.9 billion, decreasing from EUR9.4 billion a year earlier and ahead of consensus' EUR7.70 billion.

"In the face of a market returning to normal conditions, Engie has once more delivered very strong 1H results, enabling us to raise our full-year 2024 guidance," Chief Executive Catherine MacGregor said.

Write to Nina Kienle at nina.kienle@wsj.com and Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

August 02, 2024 04:50 ET (08:50 GMT)

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