France: GDF SUEZ Reports Profit Rise

GDF SUEZ reported robust results for first-half 2011, with EUR 45.7 billion in revenues, an increase of +7.9% despite very unfavorable impact of weather conditions in the Group’s domestic markets.

Growth in operating activities was solid with EBITDA increasing +8.2%. This strong increase came mainly from the contribution of International Power since February 2011, the impact of bringing new assets into service in every Group business, and good performances from the exploration & production, LNG, energy services and environment activities.

If capital gains on transactions announced to date in connection with the portfolio optimization program were taken into account, net income Group share would total EUR 3.6 billion and net debt would stand at EUR 35.4 billion.

Reporting on the first-half results, Gérard Mestrallet, Chairman and Chief Executive Officer of GDF SUEZ declared: “GDF SUEZ robust results for the first-half confirm that the Group’s business model is well suited. This balanced profile and the soundness of our financial structure are key advantages in a rapidly changing environment. Our portfolio optimization program has enabled us to offset, in just six months, the impact of the International Power combination on our debt ratios. In the same spirit as this transaction, we are continuing to implement our development strategy throughout the world and in high-growth emerging countries. The major partnership announced today with China Investment Corporation (CIC) illustrates the Group’s capacity to position itself in the most promising markets.”

After correction of the weather impact, all business lines contributed to the EBITDA’s growth during the period. In France and Belgium, the Group had to deal with exceptional weather conditions during the first half that negatively impacted the results of the Energy France, Infrastructures and to a lesser extent Energy Europe & International business lines. For the Energy France business line, the weather impact on natural gas sales (-30 TWh compared to the first half 2010) and poor hydro conditions reduced the EBITDA by 18% despite the impact of the commissioning of new thermal and wind power plants.

EBITDA for the Energy Europe & International business line grew by +21% over first-half 2010 after the integration of International Power and thanks to good performances of its assets in Latin America and North America.

The Global Gas & LNG business line renewed its EBITDA growth at +2.7%, with good performances of its exploration-production and LNG activities, offsetting the unfavorable effects of the oil/gas spread impact as well as a contraction in sales to major European customers.

The Infrastructures business line recorded a –8.9% drop in EBITDA, with the positive effects of the commissioning of the Fos Cavaou LNG terminal partly offsetting unfavorable weather conditions and reduced use of underground storages.

The Energy Services business line recorded +12% growth in EBITDA sustained by acquisitions at the end of 2010 and by its capacity to benefit from the positive effects of the recovery in certain sectors.

Finally, SUEZ ENVIRONNEMENT recorded a strong +18% increase in EBITDA, thanks in particular to the increase in volumes and profitability and to very sustained growth at Agbar.

In addition, the Efficio 2 program continued to contribute to the Group’s performance, up to EUR 500 million during the first half, EUR 300 million of which having a positive impact on EBITDA. The operating and financial synergies announced in connection with the International Power combination are confirmed.

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Source: GDF SUEZ, August 10, 2011;