Engie Launches 3-yr Transition Plan
France-based Engie has launched a major three-year plan to reposition itself for the energy market of the future by focusing on low carbon energy and reducing its exposure to commodity price movements, the company said as it released its financial results February 25.
Saying that it would speed up a previously announced plan, Engie wants low carbon activities to make up more than 90% of earnings on an Ebitda basis by 2018. It plans to grow the share of contracted/regulated activities to over 85% by the same time, so that its earnings are not vulnerable to commodity price movements. The company also wants to grow the earnings of its "integrated customer solutions" division by more than 50% over the period.
CEO Gerard Mestrallet said the company was launching "an ambitious three-year transformation plan to become leader of the world energy transition. We want to focus on low carbon activities and on integrated customer solutions, while improving the efficiency of the group." He said that the simpler organization would "enable us to seize new market opportunities and to develop new businesses to become a provider of global energy and digital solutions."
Engie said its plan would include €22bn of capital expenditure and €1bn of operational expenditure savings.It is also looking at asset disposals.
Engie was formerly known as GDF Suez, including the former French gas monopoly Gaz de France.
Utility companies are facing up to change as governments look to reduce carbon emissions to tackle global warming, and as the global gas market looks set to enter a period of surplus and lower prices after the end of the commodity "supercycle" seen over the last ten years.
At the start of this year the German utility giant E.ON split off its conventional generation assets into a separate division, Uniper, while focusing its ongoing E.ON business on the future growth areas of renewables, networks and customer solutions.