French utility and LNG player Engie, reported a decrease in profit for the first quarter 2017 “impacted by unfavorable scope effects.”
The earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 5.9 percent from €3.5 billion in the first quarter of 2016 to €3.3 billion in the quarter under review.
The drop is attributed to a decrease of hydro production in France, by hydrocarbon production and by the shutdown of the Tihange 1 nuclear power plant since September 2016, according to the company’s quarterly report.
“These effects are partially compensated by the sustained performance of the group’s growth engines, by the activities of thermal gas generation activities in Europe and by a favorable foreign exchange effect,” the report reads.
Engie’s current operating income dropped 8.5 percent from €2.4 billion in Q1 2016 to €2.2 billion in the first three months of 2017.
Revenues as of March 31, 2017 were at €19.5 billion, up 3.2 percent from €18.9 billion in the corresponding quarter of 2916.
This growth is notably due to the increase of gas purchase/sale activities, to the commissioning of new assets in Latin America (Mexico and Peru) and to tariff revisions for gas infrastructures. It is also driven by the performance of thermal gas generation activities in Europe as well as by a slightly favorable temperature impact, temperatures in France being less warm over the first three months of 2017 compared to the same period last year, the report says.
EBITDA for the Global Energy Management and LNG segment dropped sharply down compared to end of March 2016, mainly due to negative price effects and to difficult gas sourcing conditions in the South of France in January 2017 during the cold snap, Engie said.
Revenues for the segment GEM and LNG increased by 19.1 percent mainly due to higher volumes of commodities sold in Europe compared to last year.