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(Bloomberg) — Engie SA raised its earnings prediction for 2024, citing a strong first-half performance in power generation and lower-than-expected financial costs.
Engie is among the first of Europe’s major utilities to report results for the first six months of the year. The forecast upgrade reflects a jump in hydroelectric output following heavy rains in several markets, while the company has also been plowing investment into other assets from energy storage to biomethane.
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Recurring net income this year will be in a range of €5 billion ($5.4 billion) to €5.6 billion, €800 million higher than previously predicted, Engie said Friday.
“The first half was marked by the completion of 800 megawatts of new battery capacity in the US,” Chief Executive Officer Catherine MacGregor said in a statement. “In renewables we have moved forward at pace with another 1 gigawatt of additional capacity.”
The shares rose as much as 4.2%, and traded up 3.9% as of 9:30 a.m. in Paris.
Despite the bullish outlook, net recurring income fell 6.9% in the first half to €3.8 billion as a mild winter damped demand for heating.
First-Half Volatility
While driving up hydro output, rains also depressed electricity prices in key market Chile, where Engie traditionally buys some power on the market to supply clients at fixed prices, Chief Financial Officer Pierre-Francois Riolacci said on a conference call.
The company also benefited from market volatility in Europe, with booming solar and wind output increasingly nudging out fossil-fuel plants on the grid and causing huge price swings. Those fluctuations helped Engie’s gas-fired units “capture value,” the CFO said.
The utility has snapped up a broad range of energy assets in recent years to bolster capacity, from solar and wind to renewable gases. Recent media reports have suggested it’s interested in buying a stake in British regional power network Electricity North West Ltd.
It’s “an opportunity,” Chief Executive Officer Catherine MacGregor said Friday on the call. Engie is seeking to increase its exposure to regulated power infrastructure, though “we’re not ready to overpay,” she said.
(Updates with CEO and CFO comments starting in fourth paragraph.)
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