EGOC Energy One Corporation (CE)

By Inti Landauro

PARIS--French energy utility Engie (ENGI.FR) remained mired in red ink last year on another hefty write-down of the value of its conventional power plants, struggling with low electricity prices across Europe, and provisions for its Belgian nuclear facilities.

The company, formerly known as GDF Suez, said posted a net loss of 400 million euros ($421.3 million), though that was smaller than the EUR4.6 billion recorded the previous year.

Engie's net recurring income--a measure that strips out restructuring costs and other impairments--fell slightly to EUR2.5 billion from EUR2.6 billion thought the figure was in line with management's target set for the year

The company booked impairments worth EUR3.7 billion during the year, partly offset by capital gains made on the sale of assets. The impairments also include higher provisions for its nuclear plants in Belgium.

The weight of write-downs on Engie's balance sheet for another year shows how sluggish demand for energy and subsidies for renewable energy has hit European utilities hard by making traditional power plants unprofitable. The company has written down a massive $30 billion worth of assets over the past four years.

The company confirmed that it would keep its dividend at EUR1 a share this year and next and then lower it to EUR0.70 a share thereafter.

In reaction to the tough market conditions, Engie's Chief Executive Isabelle Kocher has decided to get rid of some of its assets exposed to commodity prices and energy markets and plans instead to focus on businesses with regulated prices, on services and on renewables.

The company has said last year it planned to sell assets worth EUR15 billion and invest EUR22 billion between 2016 and 2018 to bring its share of earnings before interest, taxes, depreciation and amortization from contracted and regulated activities to 85% from 50% at the end of 2015.

After selling many thermal power plants, mainly coal-fired ones, Engie has brought the proportion of its assets made up of regulated, services and renewables businesses to 75% at the end of 2016.

The company said last year's revenue fell 4.7% to EUR66.6 billion, while Ebitda fell 5.2% to EUR10.7 billion.

A group of analysts polled by FactSet expected an average net profit of EUR2.42 billion on sales of EUR65.99 billion and Ebidta of EUR10.77 billion.

-Write to Inti Landauro at inti.landauro@wsj.com

(END) Dow Jones Newswires

March 02, 2017 03:03 ET (08:03 GMT)

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