Engie reported a slight increase in shares and confirmed its 2024 forecasts, with EBITDA showing 0.9% organic growth at €12 billion, driven by renewable energy. However, excluding nuclear, EBITDA dropped 11% to €7.1 billion. Overall revenue fell by 14.8% to €52.6 billion, while net debt ratios remained stable. For 2024, Engie aims for recurring net income of €5 to €5.6 billion and plans to maintain a strong credit rating and a consistent dividend policy.
Engie Reports Positive Results for 2024
Engie has shown a slight upward trend, with shares increasing by 0.73% to reach €15.26. The energy giant confirmed its forecasts for the year 2024 while releasing its nine-month results this Thursday. During this timeframe, the company’s EBITDA experienced a modest organic growth of 0.9%, totaling €12 billion. This positive development is attributed to a robust contribution from renewable energy sources, driven by the addition of new capacities and favorable hydroelectric conditions, along with improved margins from flexible production, as noted by Fitch Ratings.
Operational Insights and Future Expectations
The nuclear segment benefited from enhanced availability and the termination of the inframarginal tax in Belgium in June 2023, which effectively offset the impact of the Tihange 2 reactor’s shutdown in February 2023. However, retail performance faced challenges due to milder weather and reduced volumes, compounded by the normalization of market conditions for networks and Global Energy Management & Sales (GEMS), according to the rating agency.
Despite these gains, Engie’s EBITDA excluding nuclear operations for the first nine months of 2024 declined by 11% organically, amounting to €7.1 billion. The GEMS segment was particularly affected, witnessing a significant 29.1% organic drop in EBITDA to €2.374 billion.
Overall revenue decreased to €52.6 billion, reflecting a 14.8% decline, with operating cash flow also down by 8.6% to €11.8 billion. The net debt to EBITDA ratio remained steady at 2 as of September 2024, comparable to the end of 2023, while economic net debt to EBITDA showed slight improvement from 3.1 to 3. Fitch Ratings anticipates moderate deleveraging throughout the year due to expectations of a weaker fourth quarter, increased investments, and cash obligations related to nuclear waste management.
Looking ahead to 2024, Engie is targeting a recurring net income attributable to the group (RNRpg) in the upper range of €5 to €5.6 billion. This projection suggests a 4-5% increase in net income for the fiscal year assuming a target of €5.5 billion, as highlighted by Jefferies. The company also expects its EBITDA excluding nuclear to fall within the range of €8.2 to €9.2 billion.
Furthermore, Engie is committed to maintaining a strong investment-grade credit rating and aims to keep its economic net debt to EBITDA ratio at or below 4 in the long term. The company has reaffirmed its dividend policy, targeting a payout ratio of 65 to 75% of the RNRpg, with a minimum dividend of €0.65 per share set for the period from 2024 to 2026.