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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  ENGIE    ENGI   FR0010208488

ENGIE (ENGI)
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Engie shares rise on dividend surprise and bullish outlook

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03/08/2018 | 03:33pm CEST
FILE PHOTO:The Engie logo is pictured on working helmets during a press visit at Engie windfarm in Radenac in Brittany

PARIS (Reuters) - French gas and power group Engie (>> Engie) said a three-year transformation plan was completed ahead of schedule and surprised the market with a higher than expected dividend as it returned to profit after two years of losses.

PARIS (Reuters) - French gas and power group Engie said a three-year transformation plan was completed ahead of schedule and surprised the market with a higher than expected dividend as it returned to profit after two years of losses.

Engie committed to pay a 0.75 euro dividend for its current 2018 fiscal year, up from 0.70 euros for 2017 and beating forecasts for an unchanged 2018 dividend - causing Engie shares to surge more than 5 percent.

Utilities' dividends are closely watched by investors who typically buy these stocks because of their relatively high and steady returns, and high cash flows.

"We have completed our three-year transformation plan earlier than expected, therefore we will boost our dividend," Engie chief executive CEO Isabelle Kocher said.

Kocher has lead a move away from fossil-fuel based power generation and into renewables, grids and energy services.

She said the shift had turned Engie into a less risky, cleaner and more profitable company, with 89 percent of core earnings now coming from contracted or regulated activities from 70 percent in 2015. Low-carbon activities now account for 91 percent of its portfolio from 75 percent three years ago.

ASSET SALES

Kocher said Engie had now completed 13.2 billion euros (11.78 billion pounds) worth of asset sales as part of a 15 billion plan and that the sales process had been launched for the remainder.

As for reinvestment of the proceeds, Engie has invested in or committed to a total of 14.3 billion euros in new activities.

Engie CFO Judith Hartmann told Reuters that about 2.5 billion of this amount had been spent on acquisitions of new businesses such as French solar firm Solairedirect and Dubai air-conditioning firm Tabreed. The rest was mainly invested in existing activities to boost organic growth.

Asked about Engie's interest in buying into German peer Innogy, Kocher said Engie is not considering any major acquisitions and is focusing on organic growth, although she did not rule out smaller acquisitions.

She also reiterated Engie is happy with its current 32.6 percent stake in waste and water firm Suez.

Engie's 2017 revenue rose 0.3 percent to 65 billion euros ($80.6 billion). Engie's revenue had risen high as 97 billion euros in 2012, but it has since shrunk due to debt-reduction and restructuring plans.

Core earnings fell 1.8 percent to 9.3 billion euros and the firm swung into a net profit of 1.4 billion euros, reversing a 400 million euro loss.

For 2018, Engie aims for 2.45-2.65 billion euros net recurring income and core earnings of 9.3 to 9.7 billion.

(Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta/Keith Weir)

By Geert De Clercq

Stocks treated in this article : Engie, Suez Environnement, innogy SE
Stocks mentioned in the article
ChangeLast1st jan.
ENGIE 1.73% 12.62 Real-time Quote.-11.96%
INNOGY SE 0.55% 38.4 Delayed Quote.17.52%
SUEZ ENVIRONNEMENT -1.79% 12.315 Real-time Quote.-16.02%
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Financials (€)
Sales 2018 63 558 M
EBIT 2018 5 304 M
Net income 2018 2 618 M
Debt 2018 21 630 M
Yield 2018 6,02%
P/E ratio 2018 11,95
P/E ratio 2019 11,12
EV / Sales 2018 0,82x
EV / Sales 2019 0,83x
Capitalization 30 210 M
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Technical analysis trends ENGIE
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TrendsBearishBearishBearish
Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 14,8 €
Spread / Average Target 19%
EPS Revisions
Managers
NameTitle
Isabelle Kocher Chief Executive Officer & Director
Jean-Pierre Clamadieu Chairman
Paulo Almirante Chief Operating Officer
Judith Hartmann Chief Financial Officer & Executive Vice President
Yves Le Gélard Chief Information & Digital Officer
Sector and Competitors
1st jan.Capitalization (M$)
ENGIE-11.96%35 489
ELECTRICITÉ DE FRANCE47.31%53 239
NATIONAL GRID PLC-10.03%34 962
SEMPRA ENERGY6.92%31 505
ORSTED23.12%27 281
E.ON-0.76%23 251