PARIS, July 28 (Reuters) - French energy company Engie reported a 24% drop in second-quarter earnings from the previous quarter, reflecting a drop in sales after a mild winter and subdued trading margins as gas and power price volatility calmed.

The company said second-quarter earnings before interest and tax (EBIT), excluding nuclear, were 2.9 billion euros. That was down from 3.8 billion euros in the first quarter, but higher than 1.8 billion euros in the second quarter of 2022, when nuclear was still included in financial reporting.

"These are still good conditions. We benefitted from prices that were favourable even after hedging" for the energy management, trading and optimization business, said CFO Pierre-François Riolacci.

Riolacci added those business segments would bring in less cash in the second half of 2023, but that was as expected given the company usually earns more in the first half during heating season, when it supplies larger volumes of natural gas to customers.

Net recurring income came in at 4 billion euros for the half-year, up from 3.2 billion euros for the first half of 2022.

Engie warned that net income would take a one-off hit of 4.4 billion euros before tax this year, due to its agreement with the Belgian government to extend the lives of the Tihange 3 and Doel 4 nuclear reactors rather than shut them down by 2025.

That agreement, finalised on July 21, involves transferring the two reactors into a joint venture with the government and paying to discharge Engie of future liability for the nuclear waste and plant decommissioning.

The non-recurring charge caused Engie's net income to swing to a net loss of 800 million euros for 2023 so far.

Engie stopped including nuclear in financial reporting this year, underlining its strategy of exiting the business and focusing on core assets: natural gas supply and infrastructure, with profits fuelling growth in renewables.

Engie had set itself a higher annual target in June of net recurring income between 4.7 million and 5.3 million euros, with an EBIT target between 8.5 million and 9.5 million euros excluding nuclear. It said it is on track to meet both. (Reporting by America Hernandez; Editing by Silvia Aloisi and Sonali Paul)