GDF Suez raises profits and possibility of British invasion

David Gow
The Guardian,
Tuesday September 2 2008

GDF Suez, the new French energy group, yesterday posted a 20% leap in first-half earnings as it reaffirmed it had no interest in buying British Energy, the UK's main nuclear power operator.
Gérard Mestrallet, the chief executive, did, however, confirm that GDF Suez was keen to be a player in Britain's nuclear energy market, where the government is courting French rival EDF to buy British Energy.
Announcing first-half results in Paris, Mestrallet said pre-tax profits rose to €8.1bn (£6.5bn) on sales up 17% to €43bn on the back of soaring demand and high prices.
The group was forged in late July from the €93bn merger of state-owned gas company GDF with Franco-Belgian utility Suez and reasserted its target of 10% annual earnings growth to €17bn by 2010.
Mestrallet said the group aimed to invest €30bn by the end of 2010 and to achieve annual savings of €1bn by 2013, and help lift GDF Suez shares.
The new cash-rich group said it would pay its first interim dividend of 80 cents or €1.7bn in late November and aims to increase the annual pay-out by up to 15% a year by 2010 when it would reach more than half of net income.
It announced a €1bn share buy-back before the end of 2008.
GDF Suez, which is building a 1.9 gigawatt power station on Teesside, has made plain it wants to operate at least two of the new-generation nuclear power plants planned by the UK government. It already operates seven nuclear stations in Belgium, where it is the biggest energy supplier, trading as Electrabel, and recently sold off a 25.1% stake in Belgian supplier SPE to Centrica, the owner of British Gas. Centrica is still a potential partner of EDF and/or GDF Suez in the UK's new nuclear power programme and now has majority control of SPE.
The French group, which has 11% of its power capacity in nuclear, has also signalled it could take part in building the second new-generation EPR reactor planned by President Nicolas Sarkozy. It is also investing heavily in renewable energy, including wind and hydro.
But Jean-François Cirelli, deputy chief executive and former head of GDF, said a government cap on gas prices had cost it almost €180m in the first half and more than €1bn since 2004.
He insisted that the group was not experiencing gas supply problems with Russia despite the country's exacerbated political tensions with the EU. Shares in the group bucked the falling trend on France's main market, rising about 2%.