Renewable Energies and services, new growth engines for EDF and Engie

The decreases of, respectively, 3.9% of the production of nuclear and 16% for hydropower, have leaded to the results of the EDF in the first half of the year. The sales amounted to 35.7 billion euros (-2,6%), for a net profit down 3.7% to € 2 billion and an Ebitda falling from 21.8% to € 7 billion.

The “market conditions” were also weighed on these results, the device of the Arenh (regulated access to nuclear power history), which forced the national carrier to sell a part of its production to its competitors alternative to a price-regulated (today set at 42 euros per megawatt-hour) then he had at the same time obtain a rates market to the highest high in order to cope with the demand of its customers. In addition, the competitive pressure has been cropped on the margins of the operator.

Electricity, an essential need and not a placeholder

When asked about his reaction to the decision of the Council of State to put an end to rates regulated gas deemed to be contrary to community law, the CEO of the public company, emphasized in a press call the differences with the electricity.

“Clearly the Council of State indicates that he perceives differently the situation of the gas and electricity, has-t-he said during a conference with financial analysts, recalling that electricity is both an essential need for people – so that the gas is not – and is not substitutable.”

However, the minister of the ecological Transition and solidarity, Nicolas Hulot had stated before the Senate in mid-July that France was going to have to obey the orders of Brussels concerning the abolition of regulated tariffs for two types of energy. “The gas as electricity, at one time or another, it will be necessary to comply with it”, he said in front of the senators.

And renewable energy services, motors of growth for EDF

In addition, Jean-Bernard Lévy said he is confident in the catch-up in the year of the nuclear production (less in the first half-year by a record number of shutdown reactors at the request of ASN), which is expected to reach between 390 and 400 terawatt-hours, compared to 384 in the first half.

The CEO also pointed out that the company was in line with its plan of disposal of assets over the period 2015/2020, done to the tune of 8 billion euros over the 10 billion projected, that with its savings plan on 2015/2018, achieved at 70%.

He also wanted to list the achievements made over the last six months in the sector of renewable energies by EDF Energies Nouvelles (EDF-EN) and in energy services, two activities, which it described as ” key engines of growth “.

Engie ahead on its transformation plan

Engie has, for its part, presented a turnover in a very slight increase (+1.6%) to 33.1 billion euros, net profit improved by 3.5% to 1.28 billion euros, an Ebitda broadly stable (- 0.1%) evolution of gross to $ 5 billion, but which shows an organic growth of 4.0% and a net profit group share in net increase (15.5%) to $ 1.5 billion.

These figures show that,”Engie is evolving more quickly than expected in a challenging environment”, according to its executive director Isabelle Kocher, who had already hinted at a meeting with journalists in early July.

The group is in advance, both on its disposal program of € 15 billion between 2016 and 2018 (achieved 73%) on its investments in new markets (12 billion primarily engaged in the renewable energy and energy services on the $ 14 billion planned between 2016 and 2018) that on its savings plan dubbed Lean 2018 ($1.2 billion savings over the same period), performed to 90%.

By the end of the year, “the organic growth expected to remain robust on our three growth engines”, renewable energy, the active regulated and services, said Isabelle Kocher.

The end of regulated tariffs of electricity would open an avenue for Engie

Regarding regulated prices, it has reminded again that their removal, approved for gas by the State Council, “should be made in parallel to the regulated tariffs of electricity”.

“We are already very active in our developments in electricity, particularly in France, and of course, the end of regulated tariffs would open an avenue for us to expand our offerings,” she added.

Objectives confirmed for 2017

The two companies have reaffirmed their goals for 2017. Engie has confirmed its primary objective of a recurring net income between 2.4 and 2.6 billion euros this year, stating that it should be located in a “mid-range”.

EDF has again anticipated Ebitda decline to between $ 13.7 and $ 14.3 billion euros this year (after 16.4 billion in 2016), which should climb to $ 15.2 billion at least next year.

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