Engie’s ’24 outlook brightens after profit jump

French energy firm Engie, announced on Thursday, it increased its financial forecast for 2024 following a rise in annual core profits, driven by robust gas and power sales during a slightly chillier winter, Reuters reported.

Engie reported a net recurring income of 5.4 billion ($5.85 billion) in 2023, an increase from 5.2 billion in 2022.

The company’s full-year earnings before tax and interest, not counting its nuclear operations, rose to 9.5 billion from €8 billion in 2022.

Engie’s CEO, Catherine MacGregor, stated that despite the retreat of European gas and power prices from their 2022 peaks—a year marked by Russia’s invasion of Ukraine and a decrease in westward Russian pipeline gas deliveries—the previous year remained relatively volatile, however, Engie’s energy management business managed to capitalise on these market conditions.

Last year, Engie not only expanded its renewable capacity by adding 3.9 GW but also secured long-term PPAs totaling 2.7 GW, most of which extend beyond five years, a trend that MacGregor expects to continue.

MacGregor expressed surprise at the current PPA market, noting a sustained strong interest from their clients and highlighting an especially robust dynamic in the United States, propelled by economic growth and a reindustrialisation movement.

MacGregor noted that while the demand in Europe is different due to falling spot prices, there’s still momentum from large industrial consumers committed to significant decarbonisation.

These consumers use PPAs to quickly decarbonise their electricity. She added that Engie continues to have in-depth discussions with its clients about these matters.

Engie secured a deal with Belgium on nuclear operations and waste liability last year, reducing risk.

A legal win over Luxembourg backtaxes allowed the company to recover 300 million euros in 2023 fees and release 120 million euros previously reserved, positively impacting 2024 cash flow.

Engie increased its 2024 net recurring income target to between €4.2 and 4.8 billion, expects its 2024 EBIT, excluding nuclear activities, to be between €7.5 and 8.5 billion, and plans a dividend of 1.43 euros per share for 2023.

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