Engie plunges into net loss on huge writedowns

French utility and LNG player Engie reported on Thursday a net loss of 4.6 billion euros for 2015, after booking 8.7 billion euros in writedowns due to plunging oil and gas prices.

These impairments mainly relate to the exploration-production activity, heavily impacted by the major and prolonged drop in oil and gas prices, and on the LNG supply & sales activity, Engie said in a statement.

Engie’s recurring net income was at 2.6 billion euros in 2015, down 5 percent as compared to 2014 . Core earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 7.2 percent to 11.3 billion.

Engie posted a revenue of 69.9 billion in 2015, a drop of 6.4 percent as compared to the year before.

“In a deteriorated market context, Engie launches today an ambitious 3-year transformation plan. This plan aims at redesigning the portfolio of activities of the Group, thanks to a EUR 22 billion Capex program and a EUR 15 billion portfolio rotation program, and at improving its risk profile by reducing its exposure to commodity prices,” Gérard Mestrallet, Chairman and CEO of Engie said.

Global Gas & LNG

The French utility said EBITDA for its Global Gas & LNG business line amounted to 1.62 billion euros, down 27 percent on year, mainly due to plummeting oil and gas prices on the European and Asian markets which sharply reduced LNG arbitrage opportunities in 2015. The result was also lower due to the disruption in supplies shipped from Egypt and Yemen.

External LNG sales fell by 47.8 TWh to 71.4 TWh, representing 86 cargoes for 2015 compared with 119.2 TWh, or 142 cargoes for 2014, Engie said.

LNG sales were “adversely impacted” by the fall in LNG sales prices in Europe and in Asia where LNG sales prices are currently very close to European prices, the utility added.

1 Euro = 1.101215 U.S. dollars

LNG World News Staff