Engie Profit , Revenues Up, Cashflow Down
French utility Engie Group reported first-half results that were up on H1 2018, with net income up from €900mn ($1bn) to €2.1bn and revenues up 9.3% to €33bn. It also benefited from unspecified gas contract renegotiations. But cash flow was down €800mn to €2.7bn, it said July 30.
CEO Isobel Kocher said the company had reaffirmed its 2019 guidance of net recurring income of between €2.5bn and €2.7bn, based on the positive momentum built over the second quarter and its visibility for rest of the year. So far it stands at €1.5bn, as it did in H1 2018.
Organic current operating income from supply was down 19% to €350mn, owing to margin pressures on retail gas and power sales in France, a negative temperature effect in Australia and lower results in business sales in Benelux and in the US. These effects were partly offset by higher power margins for business sales in France.
Networks reported an organic current operating decrease, mainly owing to the merger of the north and south zones that ended north-south transit, not yet offset by the tariff increase of April 1, 2019. Congestion costs have been higher than expected and storage profits were impacted by customer penalties caused by technical issues in France and negative price effects in Germany.
Engie benefited from a "favourable market context for business customers in France, higher power sales in France both to business and retail customers and positive price effects in the US, Belgium, Romania and the Netherlands." On the negative side were the suspension of capacity market revenues in the UK and the lower contribution in the US owing to higher costs for LNG sourcing in Puerto Rico, among other factors.
Engie and farmers joined forces to develop the biomethane sector in France by signing three partnerships at the 2019 Paris International Agricultural Show: biomethane is an energy of the future and a fully-fledged opportunity for farmers to diversify their income, said Engie. In addition, Engie acquired Vol-V Biomasse, which operates along the entire biomethane value chain and now it is France’s leading biomethane producer.