Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ENGIE. We currently have 9 research reports from 1 professional analysts.
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Contracting results, but improvement seen for 2017; is the downward trend over?
02 Mar 17
The company has presented poor results, but with decreases that are lower than expected. Revenues decreased 4.6% yoy to €66.6bn, EBITDA was down 5.2% yoy to €10.7bn with a 2.7% yoy decrease organically, and adjusted net income at €2.5bn (-4.3% yoy). On a reported basis, the group finished once again in the red with reported net income at -€0.4bn driven by €3.8bn of impairments in power plants, nuclear assets and merchant activities. The dividend is maintained within expectations at €1/share for 2016 and €0.7/share for 2017 and 2018. The good news comes from the guidance, as the group expects to return to growth with EBITDA reaching €10.7-11.3bn and net income in the €2.4-2.6bn range, despite the erosion effect from the disposal of assets already achieved.
A $1.2bn contract awarded in Saudi Arabia
30 Jan 17
Engie, through a consortium with the Saudi Electric Company (SEC) and Saudi Aramco, has won a contract to build a 1.5GW cogeneration power plant using CCGT technology in Saudi Arabia For a total investment of $1.2bn, this would take the achieved cost of the project to $1.25m/MW, which is extremely competitive. Engie would hold a 40% stake in the project, with SEC holding 30% and Saudi Aramco the remaining 30%, which implies that Engie would have a $480m investment envelope in the project. The construction contract is attached to two 20-year contracts, whereby SEC would buy the electricity and Saudi Aramco would buy the steam and hot water produced, reducing the exposure of the project to wholesale price movements, although the achieved price for the contracts have not been disclosed. The power plant is expected to be commissioned in 2019, with the operation and maintenance of the power plant being transferred to SEC in 2018.
Reduction in commodity exposure on track, but still hurts the group’s earnings
10 Nov 16
Engie has published its 9M trading update with revenue falling 11.1% yoy and 10.3% in organic terms ro reach €47.5bn, with EBITDA falling 5.4% yoy and -2% organically to €7.7bn. Nevertheless, operating cash flows decreased by 8.3% yoy to €6.8bn. Net debt fell by €1.9bn (-6.8% ytd), but the net debt/EBITDA ratio improved (2.38x). The results were negatively affected by commodity prices and compensated by higher infrastructure tariffs. The group confirmed its 2016 financial targets: adjusted net income group at the low end of the range of €2.4-2.7bn and EBITDA of €10.8-11.4bn.
Gas and LNG continue to hurt
29 Jul 16
The difficult half year of the group has been confirmed, mainly at the top-line level as it misses expectations with revenues decreasing 11.9% yoy to €33.5bn. However, the impact has been reduced due to an optimisation of the cost base with EBITDA reaching €5,651m (-7.8% yoy), mainly affected by lower commodity prices (with achieved prices), and a reduction in gas margins. Lower depreciation expenses and a reduction in impairment charges were achieved so that the operating profit increased 5.2% yoy to €3.38bn, pushing upwards in its path net income to an 11.3% yoy increase to €1,237m. On an adjusted basis, operating profit fell by 3.5% yoy to €3.5bn, providing a 1.9% organic growth, while net income decreased by 7% yoy to €1.5bn, which is in line with expectations. A €0.5/share interim dividend in cash will be paid. On the cash flow side, on top of lower earnings, the group had a negative one-off of €1.1bn of margin calls and derivatives which plunged the operating cash flow towards a 32% yoy decrease to €4.79bn. The decrease, added to the 9.6% yoy increase in capex and besides the €1.45bn from disposals and the repayment of €1.43bn of outstanding debt, made free cash flow finish in negative territory at -€657m. Despite the difficult results, the group has confirmed the full-year results with EBITDA at €10.8–11.4bn and adjusted net income in the €2.4-2.7bn range. Following the new strategy of the company, Engie has a new segment reporting in line with the new organisational structure.
Profit resists revenue fall; Electrabel IPO in sight
29 Apr 16
Engie has provided mixed results as revenues reached €18.9bn, which is a 14.3% yoy decrease and falls short of expectations by 12%. However, given the conditions, EBITDA was strong as it fell by 1.7% yoy to €3.5bn, although on an adjusted basis it grew 2.3% where the positive results were supported by the restart of 3 reactors in Belgium and cost-cutting measures, which is in line with consensus. Moreover, operating income increased 0.4% yoy to €2.4bn and +5.9% on an adjusted basis, beating forecasts by 2%. On the other hand, operating cash flows decreased by 55% yoy, but this was mainly driven by WC movements due to the use of derivatives to cover the fall in commodity prices, and higher gas inventories. It is expected that the negative WC movements will be reversed over the year. Net debt decreased by €0.7bn due to cash generation and the first effects of the disposal programme. Following this publication, the group confirmed all its FY16 guidance: EBITDA between €10.8bn and €11.4bn, adjusted net income between €2.4bn and €2.7bn, a 2.5x net debt/EBITDA ratio and an A credit rating and a €1/share dividend to be paid in cash. The group has confirmed its intention to issue an IPO on Electrabel in 2017 (the Belgian subsidiary). The process has been started as the separation of the management of the subsidiary has already been achieved and the group is currently in legally creating an independent and separate entity.
Accelerated transformation to counter commodity exposure
25 Feb 16
Weak top-line performance as both revenues and EBITDA miss estimates. Revenues decreased 6.4% yoy to €69.88bn, 4% short of the forecast, with EBITDA having a similar decrease as sales (-6.6% yoy), missing forecasts by 1.2%. Adjusted operating income decreased by 11.6% yoy to €6.32bn, but the 4% fall is less dramatic than expected; however, on a reported basis it finished in negative territory due to impairments (-€8.7bn) and restructuring costs (-€870m), pushing the reported EBIT into negative territory to -€3.24bn. Due to this, the company had a reported net loss of -€4.62bn but, on an adjusted basis, net income reached €2.6bn, representing a €17% yoy decrease, 1% above estimates. Cash flows remained strong despite the decrease in EBITDA, as operating cash flows increased by 18.6% yoy helped by a substantial improvement in working capital (+€1.16bn). The improvement allowed Engie to cover a 58% increase in net capex and its dividend payments. A €1/share dividend has been proposed, to be paid in cash with a similar one expected for 2016, while dividends have been cut for 2017 and 2018 to €0.7/share to provide investors with visibility during the transition process. A radical transformation process has been put in place with €15bn of asset disposals, an increase in investment objectives, in addition to a move towards a lighter capital-intensive model with a more decentralised approach. On 2016 guidance, the group expects to achieve EBITDA between €10.8bn and €11.4bn with net income between €2.4bn and €2.7bn. An A credit rating is targeted with a 2.5x net debt/EBITDA ratio.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - Augean - Double digit growth in ’16, good start to ‘17
21 Mar 17
Augean reported another year of double digit growth for 2016, with profits in line with our forecasts. Sales grew by 21% excluding landfill tax, while adjusted PBT grew by 18% to £7.1m before amortisation of acquired intangibles. DPS was increased by 54% to 1.0p, 25% ahead of our estimate. The business units made further strategic progress, with revenues from their top 20 customers increasing from 42% to 43% of the total, of which 88% was under contract or a framework agreement, increasing forward visibility. There has been an encouraging start to 2017 and management is confident of delivering another year of profits growth. The shares trade on undemanding single digit multiples, offering good value.
N+1 Singer - N1S Trend spotting - Strategy update
08 Mar 17
In this new product we present some strategy theme updates arising out of our latest analysis of macro trends and economic data and our innovative Quant work. We also look at upcoming events and suggest topping up on some of our Best Ideas for 2017.
N+1 Singer - Xaar - 2016 results slightly ahead, reduced visibility in 2017
22 Mar 17
Xaar’s 2016 results were slightly ahead of our forecasts, showing a small decline in profit vs. the previous year. Sales grew by 3% to £96.2m, reflecting lower sales from ceramic tile printing, offset by strong growth from Packaging and licence income and an initial contribution from the Engineered Printing Solutions acquisition. Adjusted PBT reduced by 6% to £19.5m (N+1Se £18.7m). Xaar has made significant progress in terms of strategic development in 2016. Its growth drivers are broadening out and it remains focused on its target of £220m sales by 2020. However near term growth is dependent on new products and management has guided to a higher than normal H2 weighting and reduced visibility, which is likely to restrain the share price.