* Boosting efforts to cut exposure to swings in prices
* Announces acquisition of Keepmoat Regeneration
(Recasts with industry context, adds shares)
By Geert De Clercq
PARIS, March 2 French utility Engie
took 3.8 billion euros ($4 billion) worth of impairments due to
low power prices and higher nuclear provisions in Belgium and
said it would seek to further reduce its exposure to volatile
With a flood of investment in renewable energies boosting
European generation capacity, power prices hit decade lows last
year, forcing Engie and other utilities to write down or sell
off coal and gas-fired power plants.
German companies RWE and E.ON have been
hit especially hard but the problems are more widespread.
However, Engie shares, which had set new lows in recent
weeks, rose more than six percent on a confident 2017 earnings
outlook and progress on the gas and power group's strategic
Engie Chief Executive Isabelle Kocher noted progress on a
three-year plan to focus more on regulated and contracted
business. These activities made up 75 percent of Engie's
business at the end of 2016, with a target to boost that to 85
percent by 2018.
Kocher wants to turn the gas and power utility into a group
more focused on regulated power infrastructures, notably gas
networks, and contract-based energy services.
Engie CFO Judith Hartmann said Engie was in advanced talks
with potential buyers of its oil and gas exploration and
production activities, but declined to give more detail.
She added that Engie was confident in its ability to achieve
85 percent of its planned assets sales by the end of 2017.
The group has budgeted 15 billion euros worth of asset sales
for the 2016-18 period and has already sold 8 billion euros
worth of assets, she said.
Kocher said that Engie was also looking for partners to
invest in its Belgian unit Electrabel.
As part of its plan to reinvest the proceeds of these sales
into less commodity-sensitive activities, Engie on Wednesday
announced the 330 million pound ($405 million) acquisition of
Britain's Keepmoat Regeneration, which specialises in renovating
buildings for local authorities.
Kocher said that in 2016 Engie had realised 530 million
worth of cost cuts, with plans to increase its cost cuts target
by 20 percent to 1.2 billion euros by the end of 2018.
Core earnings before interest, tax, depreciation and
amortisation (EBITDA) fell 5.2 percent to 10.7 billion, and net
recurring income fell 4.3 percent to 2.5 billion. The net loss
narrowed to 400 million euros from a net loss of 4.6 billion in
Engie said it would pay a one euro dividend per share, in
line with expectations, and said that on 2017 and 2018 it
planned to pay 0.70 euros.
($1 = 0.9498 euros)
(Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta/Keith