Engie To Scale Back Overseas, Cut Costs To Boost Revenues: Sources

www.oann.com | 5/16/2018 | Staff
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PARIS (Reuters) – Utility Engie is poised to cut back its geographical spread of businesses and focus on grids and renewables in a 1 billion euro cost-cutting drive to bolster revenues, sources familiar with the matter said.

Engie has been criticized for being too complex and conglomerate-like and CEO Isabelle Kocher is expected to address this in a 2019-2021 corporate strategy plan to be announced next Thursday, when the company also releases 2018 results.

Sources - Knowledge - Company - Plans - Kocher

Two sources with knowledge of the company’s plans said Kocher was likely to scale back the number of countries Engie operates in – it is present in some 70 countries – notably in central Europe.

Both said Kocher would focus the gas and power group more strongly on grids and renewables after selling some 15 billion worth of fossil-fuel related assets in 2016-18.

Sources - Union - Official - Kocher - Costs

One of the two sources, a union official, said Kocher would aim to cut costs by 1 billion over three years, extending a 1.3 billion euro cost reduction plan in 2016-18.

Daily business newsletter La Lettre A had first reported that Engie was targeting a billion-euro profit-boosting plan.

Engie - Business - Cash - Flow - Move

Engie will also need to acquire at least one well-established, cash-generating business too make up for cash flow lost in its move away from fossil fuels, two sources, including a banker, said.

“The plan will have to involve major acquisitions. The planets are aligned, but the target remains to be decided,” one of them said.

Targets - Transportadora - Associada - Gás - Pipeline

Potential targets include the Transportadora Associada de Gás pipeline owned by Petrobras, Dutch renewables utility Eneco, or the U.S. renewable energy assets of Portugual’s EDPS, sources said.

Engie cut is net debt to core earnings ratio to 2.2 at the end of 2017 from 2.5 two years earlier. It can further boost its financial firepower by selling part of its 75 percent stake in French gas transport firm GRTgaz,...
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