By Inti Landauro
PARIS--GDF Suez SA (GSZ.FR) warned Thursday that the closure of
two nuclear power plants it operates in Belgium will hit its profit
in the second half of the year by 40 million euros ($54 million)
for each month the plants are closed.
The French power utility adjusted its full-year financial target
saying its recurring net profit will be lower than the target of
between EUR3.3 billion and EUR3.7 billion it announced two quarters
ago to take into account the months of effective outage of the two
nuclear reactors during the second half of the year.
Last month, GDF Suez had said the halting of the Doel 3 and
Tihange 2 reactors would last longer than initially expected for
additional tests to be carried out. The company expected to restart
the reactors in July.
The additional delay is another blow to GDF Suez's European
thermal power production business. The company faces stiff
competition from substantially subsidized renewable sources, while
the lasting economic crisis has lowered energy consumption in
Europe.
The two nuclear reactors were shut down in late March by the
Belgian authorities following tests on the reactors' pressure
vessels that showed "unexpected results" regarding their
resistance. Both reactors had already been shut in 2012 after
micro-cracks were found on their pressure vessels, which enclose
the reactors' cores.
Additionally, adverse foreign exchange rates and warmer weather
than usual dented GDF Suez's earnings before interest, taxes,
depreciation and amortization, or Ebitda, in the first half of the
year to EUR6.6 billion, which was down 14% from a year earlier. Net
recurring income for the period fell 13% to EUR2.1 billion. Lower
power prices in Europe and a drought in Brazil, which hit hydro
output, added to the utility's woes in the first half, the group
said. Overall revenue contracted 6.3% to EUR39.4 billion.
Net profit, however, grew 51% to EUR2.6 billion for the period,
supported by lower debt and lower depreciation and amortization
following a EUR14.9 billion write-off last year.
The deterioration in the company's outlook and its first-half
performance highlight the still challenging situation faced by GDF,
one of Europe's largest utilities, as it is confronted with lower
demand and stiff competition from heavily subsidized renewable
energy on the continent.
Write to Inti Landauro and Geraldine Amiel at
inti.landauro@wsj.com
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