GDF SUEZ Announced Results as of September 30, 2013
OREANDA-NEWS. Revenues at September 30, 2013 were EUR 59,632 million, representing organic growth of +3.4%. This expansion is driven by the Group's continued development in fast growing markets, favorable weather conditions compared to 2012 (in particular during the first half) which had a positive impact on natural gas sales in France, and by an increase in LNG sales to third parties reflecting strong arbitrage activity in Asia and Europe.
EBITDA for the period was EUR 10,296 million, corresponding to a gross variance of -6.5% and to an organic variance of -1.4% compared to 2012. Excluding scope effects related to the portfolio optimization program (EUR -379 million) and the impact of foreign exchange movements (EUR -215 million), the organic EBITDA performance to September 30 reflects, as expected, contrasts between the business lines, due in particular to the persistence of unfavorable economic and regulatory conditions in Europe:
good operational performance of the Energy International business line, mainly driven by the commissioning of new plants in Thailand and Latin America, together with favorable price effects in Asia-Pacific and Latin America, and by the strong performance of LNG activities in the United States;
results from the Energy Europe business line are down significantly due to the adverse impact of outages at the Doel 3 and Tihange 2 nuclear plants until early June 2013, and by the decrease in market prices for power, which more than offset both the favorable weather conditions and the recovery in early 2013 of the 2012 shortfall on regulated gas tariffs in France;
lower results from the Global Gas & LNG business line, notably due to temporary lower production in the exploration-production activity impacted by amongst other factors the suspension of production in Norway during the first half of 2013;
good operational performance at the Infrastructures business line, benefiting in particular from favorable weather during the first half of 2013;
improved results from the Energy Services business line thanks to favorable weather conditions during the first quarter and to cost reduction measures.
At September 30, 2013, net debt amounts to EUR 29.8 billion taking into account, amongst other factors:
EUR 7.1 billion of Cash Flow From Operations (equivalent to EUR 5.3 billion of free cash flow), and
EUR 4.7 billion of gross capex
The net debt /EBITDA ratio stands at 2.2x, in line with the objective (.2.5x). At the end of September 2013, the Group reports a high level of liquidity at EUR 17.2 billion, including 9 billion of cash and EUR 8.2 billion of available credit lines. The average cost of gross debt is stable at 3.64%.
Consolidated IFRS figures show similar trends:
For 2013, the Group reaffirms its financial targets2:
net recurring income Group share3 between EUR 3.1 and 3.5 billion, assuming average weather conditions and no significant regulatory changes. This target is based on an estimated EBITDA of between EUR 13 and 14 billion, with pro forma equity consolidation of SUEZ Environnement as of January 1st, 2013
Gross capex between EUR 7 and 8 billion
Net debt/EBITDA ratio .2.5x and an “A” category rating
In light of the operational results for the first nine months and of the positive contributions to net recurring income from the reduction in cost of debt, the impact of Perform 2015 action plan and the evolution of amortization charges, the Group expects the full year net recurring income Group share3 at the upper end of the range given above.
In addition, the Group has initiated its annual process for reassessment of the carrying value of assets. It is foreseeable that this process will lead to the adjustment of the carrying value of certain power generation and storage assets, as the economic and regulatory conditions continue to worsen in Europe, which affect the whole industry. This readjustment of book values, non cash and non recurrent, would have an impact on the net income Group share in 2013 and not on the net recurring income Group share above mentioned.
Significant events during the period
The Group developed new opportunities and reached key milestones in fast growing markets
In Dubai, delivery of a first LNG cargo with a capacity of 138 000 m3;
In Algeria, signing of an EPCC contract (engineering, procurement, construction and commissioning) in relation to the first development phase of the Touat gas field;
In Mongolia, confirmation of preferred bidder status for the combined heat and power coal plant CHP5 with 415 MW of power production capacity and 587 MW of heat capacity, pre-qualification for the Tavan Tolgoi project (450 MW) and signing of a memorandum of understanding with Newcom for the development of renewable energy projects;
In Brazil, commissioning of the first 75 MW turbine at the Jirau hydro power plant, which will have a total installed capacity of 3,750 MW, and acquisition of a 51% stake in Emac, a Brazilian company specializing in the maintenance of cooling systems and multi-technical services;
In Morocco, signing of a power purchase agreement for the 1,386 MW Safi thermal power plant;
In Malaysia, entry into a first exploration and production licence for offshore deep water exploration (20% stake);
In Azerbaijan, signing of a natural gas long-term contract to be sourced from the Shah Deniz field in the Caspian sea, with a volume of 2.6 billion cubic meter per year, for 25 years;
In Uruguay, signing of a contract for the construction and operation of the country's first LNG import terminal;
In Mexico, participation to the second phase of the Los Ramones gas pipeline project;
In Peru, following the commissioning of the 564 MW Ilo cold reserve power plant, the Group is now the largest operator of power capacity in the country;
The Group has also entered into an agreement to acquire a 25% stake in 13 exploration licences with shale gas potential in the UK.
In mature markets, the Group further optimized its portfolio and continued its evolution towards the Energy Partner business model:
Continuation of the portfolio optimization program, with the sale, in Portugal, of a 50% stake in thermal and renewable power production assets to Marubeni and, in Australia, with the sale to Mitsui of a 28% stake in four power generation assets and in Simply Energy, a retail business;
In the field of energy efficiency, acquisition in the UK of Balfour Beatty Workplace, a company active in facilities management, and entry into the Polish district heating market with the purchase of a portfolio of heating assets. In France, a consortium led by the Group has been awarded a EUR 530 million contract relating to the ITER international energy research project;
In Belgium, progress was made in the negotiations with the government on the extension conditions for the Tihange 1 nuclear power plant;
Finally, a call - initiated by the Group - from the heads of 10 largest European energy companies, seeking to revitalize the European energy policy.
Moreover, Perform 2015 action plan implemented across all business lines continues to deliver in line with its expected objectives.
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