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A great 9M23 overall with a standout performance attributed to GEMS during the H1. Although the Q3 results were weaker compared to 2022, Engie raised its FY23 guidance while maintaining a wide €1bn range on the EBIT reflecting a cautious view of Q4. It is likely to be affected by a 2022 base effect while the management estimates that demand for gas among European industrial customers has seen 10% to 20% volume destruction since 2022 and that this is unlikely to be recovered.
Companies: Engie (ENGI:EPA)ENGIE SA. (ENGI:PAR)
AlphaValue
Engie released an adjusted EBITDA excluding Nuclear for H1 23 of €8.8bn, up by €2bn yoy, beating market expectations. As in Q1, 95% of the outperformance was achieved by Other, for which the group has already indicated that a normative EBIT should be around €1bn on an annual basis. So beware of the hype surrounding these excellent figures!
Engie and the Belgian government have signed an agreement on the 10-year extension of the two nuclear plants Doel 4 and Tihange 3 with a re-start as of November 2026. Engie and the CPN have also found a common ground on provisions for waste liabilities. After tough discussions, the two parties agreed on a fixed €15bn amount, resulting in an additional €4.5bn provision charge in FY23 and corresponding to c.55% of the EBIT FY23.
An excellent first quarter for Engie with another strong contribution from Global Energy Management & Sales (GEMS), accounting for 38% of the total EBIT at €1.6bn. To a lesser extent, renewables benefited from higher prices and volumes which contributed with GEMS to offsetting the slowdown in retail and nuclear. The group has shifted the 2023 guidance to the top-end with an EBIT excluding nuclear of €6.6-7.6bn and a net income group share of €3.4-4.0bn but remains conservative due to the expecte
As mentioned in our previous publication, Engie’s dark cloud remains the future of the its nuclear fleet in Belgium in the face of political contradictions but also the CPN’s increased requirements. In fact, the Belgian government required a 10 year-extension of the two last nuclear plants but is still in negotiations with the French energy player which is delaying the final agreement, while the CPN provision requirements is overhanging Engie’s horizon and preventing a clear outlook.
Unsurprisingly Engie delivered a strong operational and financial performance in 2022, benefitting from unprecedented commodity market prices and volatility, pushing the earnings from GEMS, thermal and renewables to exceptional levels. These record results set the group on the right track for 2023 and put it in a strong position to invest in renewables but also propose an exceptional dividend. Despite a complicated and costly Belgian nuclear dismantling, the group managed to retain a relevant fi
The major French utility delivered a very impressive performance for this third quarter 2022, with a 49% rise in EBITDA to €10.7bn, driven by strong trading activities through the GEMS division but also by growth in the thermal and supply business units, and in renewables. Engie confirmed its winning position in a highly-volatile energy market environment and its commitment to playing a leading role to support the security of supply in Europe. The guidance for FY2022 was upgraded.
Engie released a very strong set of results, with EBITDA surging by more than 43% and net income multiplying by 2.5x. No doubt on the drivers: the trading desk and nuclear generation have become cash cows. The rather conservative guidance was however confirmed. The group also reduced its exposure to Gazprom and Russian gas, while it engaged in manoeuvres to keep the threat of windfall taxes at bay as far as possible.
Engie released a set of very strong Q1 22 results, above expectations, driven by its thermal, nuclear and trading activities. As a result, the guidance is improved by more than 20% on the back of more realistic assumptions thus correcting the black spot in the FY21 results. The lower exposure to Russian gas is also worthy of note to reassure investors and to bring some confidence back into an over-sanctioned stock for several months. More than ever, Buy.
Engie beat our expectations on the FY21 results driven by the remarkable performance of its nuclear assets. While some might think of this as a one-off, the group has confirmed with a set of solid targets for 2022-24, paving the way for continuous growth after turning the page on nuke and Equans, even if conservative assumptions leave room for upside. Note, however, a slight disappointment in the dividend, with €0.85 proposed vs €0.90 expected, and net debt affected by margin calls.
Engie released a very strong set of 9M 21 results and, for the second time in a row, upgraded its FY21 guidance substantially. After the sale of Equans at a very interesting price, the group also announced the purchase of Eolia, a Spanish renewables pure play with 0.9GW of operating assets, with Crédit Agricole (40%/60%). More than ever, Engie confirms the attractiveness of its investment case by operating its strategic revamping in a very efficient way. Positive recommendation reaffirmed.
What if the best solution for the energy transition were … nuclear power? Nuke is back at the heart of political debates in the context of the current energy crisis and massive but insufficient investments in renewables. This short review provides an overview of nuclear power in Europe and speculates on options. This ‘nuke optionality’, hinging on a favourable green taxonomy, is a game-changer for EDF, Centrica, Fortum but also Engie, Iberdrola, Enel and EDP.
Driven by nuclear power, weather-related demand and the increase in power prices, Engie released a set of strong H1 figures. EBIT is up by 44.4% in organic terms, while group recurring net profit jumped by 67%. This led to guidance being improved by €200-300m at EBITDA, EBIT and net result levels. The sale of an 11.5% equity stake in GRTgaz will decrease net indebtedness, while the bidding process of Equans is also on track, with further information in H2. Positive recommendation confirmed.
Expected for months now, Engie finally unveiled its roadmap for the coming years to show its operating organisation and expansion in renewables. This involves €9-10bn of disposals (including Bright) and €15-16bn of investments by 2023 to move towards the successful scheme of a strong expansion in green assets backed by the network cash-cow. A promising move, midway between the merciless capacity-driven utility race and the cautiousness that such a strategy requires. Positive view confirmed.
A solid start to the year from Engie. Except for Renewables, which were strongly affected by adverse events in the Americas, all activities exhibited growth and drove EBIT up by 10% organically. In particular, the cold weather in Europe increased both energy volumes and prices. FY21 guidance reaffirmed, as much as our positive view.
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Strix has reported FY23 results to 31 December 2023 with adjusted PAT of £20.1m, in line with our updated forecast and company guidance provided in January. Revenue grew 35.2% to £144.6m, benefitting from the full year inclusion of the Billi acquisition, albeit slightly below our forecast of £151.0m. Its core Kettle Controls division also performed robustly, growing 2.7%, ahead of the broader market and indicating market share gain. Recent acquisitions have noticeably improved the Group’s growth
Companies: Strix Group PLC
Zeus Capital
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Liberum
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Cavendish
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Cohort announces that its subsidiary SEA (Systems Engineering and Assessment Ltd.) has been awarded a major contract by the UK’s Ministry of Defence to provide Electronic Warfare Counter Measures (Increment 1a) (EWCM 1a) to the Royal Navy with a total value of at least £135m. This includes provision and support of SEA’s Trainable Decoy Launcher System, Ancilia. At the FY 24 interim results Cohort had commented on an overall “increased tempo” of order intake. The Group reported a closing order b
Companies: Cohort plc
Equity Development
Positives emerged, particularly in H2, as the recovery commenced within the kettle controls market. Billi was the architect of the revenue improvement, with LAICA also delivering a double-digit increase in the top line. Margins improved, notwithstanding a change in the mix. Encouragingly, investor concerns on debt were allayed with the careful management of cash, and latterly as bankers raised the net debt/EBITDA covenant to 2.75x. With further emphasis on costs and cash conservation and a lik
Companies: Luceco PLC
Companies: FOG TND BVXP ACC HDD
Quadrise continues to advance towards commercial revenues for its innovative fuel and biofuel technologies, with each of its projects approaching key milestones in 2024. Preparatory steps for the MSC Shipmanagement (MSC) fuel trials are now complete and fuel supply agreements are nearing finalisation. Quadrise will achieve its first licensing revenues on the successful completion of Valkor’s project financing (timing uncertain). Quadrise also successfully concluded its Morocco trial, paving the
Companies: Quadrise PLC
Edison
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Judges Scientific is a group involved in the buy and build of scientific instrumentation businesses. Testament to the strength of its highly engineered offer and global diversified customer base, total revenue increased an impressive 20.2% to £136.1m (organic +15%), with adj. PBT +7.5% to £31.7m (FY2022: £28.3m), 3.1% ahead of our estimate of £30.5m. Fully diluted (FD) adjusted EPS increased a more muted 2.6% (impacted by anticipated tax headwinds) to 368.5p (basic adj EPS 374.5p), 3.4% ahead of
Companies: Judges Scientific plc
WHIreland
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Canaccord Genuity
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Gelion has reported in line H1 FY24 results that demonstrate continued strong cash management and steady progress in its pursuit of next generation lithium-sulphur battery technologies. Encouraging early test results justify last year’s IP acquisitions and validate Gelion’s Li-S battery technology plan, with additional progress expected to be reported in H2 alongside its pursuit of a strategic partner for its planned Advanced Commercial Prototyping Centre (ACPC) facility in Australia. There is a
Companies: Gelion PLC
Forterra’s FY23 (to 31 December) earnings were slightly higher than guidance, which was raised in January, with resilient pricing partly offsetting a steep fall in demand among its main end users, large housebuilders. Our estimates are broadly unchanged, other than reflecting a more conservative stance on the final dividend. Despite a cautious tone in the outlook statement, we believe the largest housebuilders may now rebound more strongly than smaller peers.
Companies: Forterra Plc
Progressive Equity Research
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