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GDF Suez Earnigns to Be Hit by French Tariffs in 2012, CEO Says

Date : 12/06/2012 @ 2:41PM
Source : Dow Jones News
Stock : Engie (ENGI)
Quote : 16.29  -0.125 (-0.76%) @ 10:09PM
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GDF Suez Earnigns to Be Hit by French Tariffs in 2012, CEO Says

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By Geraldine Amiel

PARIS--GDF Suez SA (GSZ.FR) will see its earnings hit this year as regulated energy tariffs set by the French government won't offset supply costs, its chairman and Chief Executive Gerard Mestrallet said Thursday.

The company expects to lose around 185 million euros ($242.2 million) in earnings before interest, tax, depreciation and amortization this year, and for the fourth quarter alone, the Ebitda shortfall is estimated at EUR165 million, Mr. Mestrallet said at a press conference ahead of an analyst meeting.

The French government is to announce Monday the set tariffs for next year; Mr. Mestrallet declined to make any comment on them until then.

Earlier Thursday, French daily Le Figaro reported that regulated gas prices in France are to rise between 2% and 3% next year.

Late Wednesday, the group announced the acceleration of a plan as it seeks to cut its debt and loosen ties with waste and water unit Suez Environnement SA (SEV.FR) and European activities due to a deteriorating economy there.

Speaking on French radio RTL, Prime Minister Jean-Marc Ayrault said the government is negotiating with GDF Suez to try to alter the mechanism and the contracts that determine rises in regulated gas prices.

"I can't confirm the exact figure, but it's true that we are regularly confronted with these price increases linked to the contracts indexed to the price of oil," said Mr. Ayrault.

Write to Geraldine Amiel at geraldine.amiel@dowjones.com

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