(Bloomberg) — French utility Engie SA raised its full-year profit forecast as it benefits from currency fluctuations, its huge acquisition in the UK, cost cuts and energy market volatility linked to the war in the Middle East, which helped mitigate a profit decline in the first six months of the year.\u00a0<\/p>\n
Net recurring income for the full year should be in a range of \u20ac4.9 billion ($5.6 billion) to \u20ac5.5 billion, \u20ac300 million higher than previously forecast, the company said in a statement Friday. It fell to \u20ac3 billion in the first half from \u20ac3.1 billion a year earlier, caused by lower French gas demand and the shutdown of nuclear reactors in Belgium.\u00a0<\/p>\n
The improved guidance is due to the earlier-than-expected completion of the UK Power Networks acquisition, currency fluctuations, \u201ca bit of volatility in market prices, and a performance plan that\u2019s delivering beyond our expectation,\u201d Chief Executive Officer Catherine MacGregor said on a conference call.<\/p>\n
Engie and other European utilities are betting on an expected increase in power demand driven by the artificial intelligence boom and electric cars by investing in wind, solar, battery storage and power networks. It bought a leading UK power-distribution network for \u00a315.8 billion ($21 billion) including debt in May to counterbalance its exposure to French gas assets, which may suffer from a shift away from fossil fuels.<\/p>\n
Engie has also been cutting costs to help counter a loss of earnings from Belgium, where three of its five reactors in the country were closed last year. The firm is now in talks to sell its entire Belgian nuclear business to the state to eliminate risks related to energy policy changes and focus on assets with more predictable income and expenses.<\/p>\n
So-called performance effects, which include cost cuts and other efficiency gains, were more than \u20ac100 million above the company\u2019s expectations in the first half, Chief Financial Officer Pierre-Francois Riolacci said Friday. The company also had a better-than-expected gas trading profit, although increased market volatility contributed \u201cvery little\u201d to the improved earnings guidance.<\/p>\n
Earnings of the company\u2019s energy management unit, which hosts its trading activities, were partly mitigated by more challenging conditions in power markets, the company said.\u00a0<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — French utility Engie SA raised its full-year profit forecast as it benefits from currency fluctuations, 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