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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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The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme
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Cavendish
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FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively
Companies: Billington Holdings Plc
Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k
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Tamesis Partners
Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car
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discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli
Companies: discoverIE Group PLC
Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear
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Edison
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Canaccord Genuity
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SP Angel
Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.
Progressive Equity Research
Liberum
Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.
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Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first
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