PARIS (AP) — French gas and electric utility GDF Suez said Thursday that the slowing European economy and 'exceptional' weather conditions caused a double-digit slump in profit last year and warned that 2012 earnings could stagnate.
The partially state-owned company reported net profit fell 13.3 percent at euro4 billion ($5.3 billion) in 2011 compared with a year earlier, as the mild winter in early 2011 triggered a dramatic drop in natural gas sales in its core French market.
The company warned that recurring net income, an earnings yardstick that excludes restructuring and other costs, would be between euro3.5 billion and euro4 billion in 2012, after falling nearly 17 percent last year to euro3.5 billion.
GDF Suez shares fell to their lowest level of the year to date on Thursday as investors took on board the company's weakening outlook. By early afternoon in Paris, the stock was down 5.4 percent at euro20.17.
Based in Paris, GDF Suez is one of Europe's leading coal and gas-fired electricity producers with an installed base of 117.3 gigawatts, with plans to increase to 150 gigawatts by 2016. It is also a major player in natural gas exploration, production and transport, with aims to lift annual gas production to around 65 million barrels of oil equivalent by 2014 or 2015, from 51.2 million barrels of oil equivalent in 2010.
Chief Executive Gerard Mestrallet has long sought to expand GDF Suez's presence in nuclear power, but those ambitions have suffered a series of setbacks including the decision by Belgian authorities to shutter the seven reactors GDF Suez operates there by 2025, following Japan's Fukushima nuclear catastrophe.
Last year it took control of Britain's International Power in a $21.5 billion deal, creating the world's largest independent power producer and making it the second French utility to run a U.K. competitor.
Natural gas consumption in France is at record highs this month as exceptionally low temperatures hit countries around Europe and supplies from Russia, fell by nearly a third. GDF Suez said it is tapping reserve stocks to make up the difference for now.
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