- The Washington Times - Thursday, March 5, 2009

GdF Suez said Thursday its net profit jumped 13 percent to euro6.5 billion ($8.2 billion) last year thanks to higher demand and prices for gas and electricity in key markets both in Europe and internationally.

GdF Suez, formed last July through the merger of Franco-Belgian electricity producer Suez with France’s state-controlled gas supplier Gaz de France, also promised further growth in earnings this year, although the global recession and falling oil prices will slow the pace of increase.

The company, of which the French state still owns 35.7 percent, reported growth in earnings before interest, tax, depreciation and amortization (EBITDA) of 11 percent, meeting its own guidance of at least a 10 percent increase in the closely watched measure of profitability.

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However, that performance included a sharp slowdown over the fourth quarter, when economies stalled around the world. In fact, EBITDA was up 19 percent through the first nine months of the year.

Speaking on a conference call with reporters, Chairman and Chief Executive Gerard Mestrallet said GdF Suez aims to further raise EBITDA to between euro17 billion and euro18 billion by 2011 “if the economy returns to normal.”

The company had previously pledged to increase EBITDA to euro17 billion by 2010.

In a statement, the company said that EBITDA this year will be higher than the euro13.9 billion reported in 2008, but it didn’t set a target. Earnings in the gas and liquefied natural gas businesses are forecast to suffer from lower average oil prices this year than last, when oil hit an all-time high.

GdF Suez’s net profit was boosted by a euro1.9 billion gain on the sale of Suez’s stake in Belgian natural gas supplier Distrigas last year. The sale, to Italian oil and gas company Eni SpA, was one of the conditions placed on the GdF Suez merger by European Union authorities.

“The crisis won’t spare anyone,” said Mestrallet, who noted the drop in energy prices in recent weeks, which will weigh on GdF Suez’s earnings.

The company is one of Europe’s largest utilities, and is a world leader in liquefied natural gas, a fast growing segment of the natural gas industry.

Mestrallet confirmed GdF Suez’s investment program, which still foresees spending euro30 billion over the 2008 through 2010 period.

GdF Suez also has ambitions to expand its presence in nuclear power. Already the operator of nuclear reactors in Belgium, GdF Suez has been chosen as a minority partner in the second evolutionary power reactor, or EPR, that France plans to build in Normandy.

Last month, GdF Suez and Spanish rival Iberdrola said they will seek to jointly develop new nuclear power plants in Britain.

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