First Quarter’s Mixed Figures Point at Never-ending Changes in Energy Sector
In just a few hours, E.ON announced progress of its attempts to revamp business, former-GDF Suez changed name into Engie and reported a 10% year-on-year fall in first-quarter EBITDA, Saipem registered a simultaneous 24.5% increase in net profit, and Galp Energy wrote that its net profit more than doubled in the first three months of the current year from the same period of 2014.
The fact that almost all of them confirmed their guidance for the year indicate that companies have already adjusted their strategy. The fact that they are increasingly focusing on one segment or another, depending on their strengths and weaknesses, demonstrates the need for a higher specialisation in the industry.
Portugal’s Galp is betting on refining margins, Italy’s Saipem confirmed its commitment to the drilling business, France’s Engie confirmed its its interest for LNG to Montoir-de-Bretagne, while Germany’s E.ON announced the new management structure.
All in all, despite the skepticism, things are not going that bad.
E.ON BETS ON RENEWABLES, SAIPEM MAINTAINS FOCUS
‘E.ON aims to be customers’ partner of choice for innovative energy solutions. To achieve this aim, it will focus on three core businesses: renewables, energy networks, and customer solutions’ reads the note released by the German company on Monday.
On the other hand, other energy companies cannot revolutionise their business, but can reap the benefit of their technology.
“The strategy put in place over the past years is based on the strength of the drilling business, on the effort to complete legacy and loss making projects as well as possible” Umberto Vergine, Saipem CEO, said in a press release on Monday.
The Italian oilfield service company confirmed the guidance for the year, and reported a substantial increase in EBIT from €127 million in the first quarter of 2014 to €159 million, but a even more significant 26% plunge in investments. This is mirrored by a 38% collapse in new contract.
“New challenges have arisen in the sector, in particular slowing client capex as a result of the current oil-price environment. However I am confident that Saipem has created a solid basis to enable it to complete its recovery process and return to historic levels of profitability” Vergine concluded.