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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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Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price
Companies: Supreme PLC
Zeus Capital
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Cavendish
Companies: MPE TRI VNET BVXP HVO
Shore Capital
Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the
Companies: Vianet Group plc
Capital Access Group
Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,
Companies: Renewi Plc
Edison
Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr
Companies: James Latham Plc
SP Angel
Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.
Companies: Norcros plc
Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-
Companies: Headlam Group plc
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Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well
24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: FTC AGL SRT SOU G4M AOM SUP
Hybridan
Companies: Ilika plc
Liberum
Companies: Gattaca plc
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