(Adds EDF, analyst comment)
PARIS Jan 15 French utilities EDF and
GDF Suez have announced cost cuts and asset sales to
further shore up balance sheets hit by high debt and slack
EDF, which runs France's 58 nuclear reactors and is 84.4
percent state-owned, said on Tuesday it will announce cuts when
it releases full-year results on Feb. 14.
French daily Le Figaro reported the cuts would total 1
billion euros ($1.3 billion) and focus on information technology
and suppliers, but would not involve layoffs.
A spokeswoman told Reuters that EDF would maintain planned
investment in its network and on nuclear maintenance, as well as
the planned hiring of 6,000 new staff, or a net 2,000 new jobs.
The savings plan will come on top of a 2.5 billion euro plan
launched in 2011 and due to be completed in 2015.
"EDF could go further if it wanted, but one cannot expect a
state-controlled company to increase unemployment in France in
order to benefit foreign shareholders," a London-based utilities
analyst told Reuters.
Several utilities have announced austerity drives and asset
sales as Europe's weak economy and the relentless drive to save
energy hits demand for electricity.
GDF Suez, Europe's biggest utility, said in December it
would cut costs by 3.5 billion euros by 2015.
On Tuesday, GDF Suez and German peer E.ON sold a
49 percent stake in Slovak gas utility SPP to Czech energy firm
EPH for 2.6 billion euros.
GDF has now raised 5 billion euros from disposals and aims
for another 11 billion under its new programme for 2013/14. It
said the Slovak deal would help cut debt by about 1.3 billion
euros from 46 billion at the end of last year.
The deal was a milestone for E.ON, which has now sold 17
billion euros of assets, topping its target of 15 billion by the
end of 2013.
EDF shares gained 2.1 percent, outperforming a 0.3 percent
higher CAC 40 index, boosted by a string of positive
brokerage reports. GDF Suez fell 0.8 percent.
Analysts said the two groups also benefited from recent
agreements with France. EDF said on Monday the government had
agreed to reimburse it for a 4.9 billion euro shortfall in
renewables subsidies, lifting its shares 5 percent on the day.
GDF Suez chief executive Gerard Mestrallet said on Friday a
new system of automatic indexation of consumer gas prices would
be more in line with its operating costs..
GDF Suez and other suppliers have repeatedly challenged
French caps on gas tariff increases in court.
Both agreements seem to indicate President Francois
Hollande's government may not be as unfriendly to utilities as
the market feared at the time of his election.
"The least that can be said is that the French government is
taking a pragmatic stance," the London-based analyst said.
($1 = 0.7492 euro)
(Reporting by Geert De Clercq; Editing by Dan Lalor)