November 12, 2009 / 8:24 AM / in 8 years

WRAPUP 2-Downturn bites for European power sector

* GDF Suez, RWE, CEZ 9-mth profits miss expectations

* GDF Suez stock down 0.8 pct, CEZ down 0.6 pct

* RWE shares down 0.4 pct

* EDF tweaks 2009 outlook down; shares drop 1 percent

(Adds CEZ earnings, shares)

By Peter Dinkloh and Marie Maitre

FRANKFURT, Nov 12 (Reuters) - The economic downturn is hurting power producers more than feared, results from some of Europe’s largest utilities GDF Suez GSZ.PA, EDF (EDF.PA), RWE (RWEG.DE) and CEZ CEZPsp.PR, showed on Thursday.

Both France’s GDF Suez and Germany’s RWE reported weaker earnings in the first nine months of the year that also missed expectations. Tumbling gas prices due to weak industrial demand were at the heart of the companies’ problems. [ID:nLA022008]

RWE also echoed problems of peers in the subdued British market.

The operating result of RWE, Europe’s fifth-largest utility by sales, fell 4.4 pct to 5.53 billion euros ($8.29 billion) in the nine months through September, compared with the 5.57 billion-euro average of estimates in a Reuters poll. [ID:nLC5727]

Nonetheless, Essen, northern Germany- based RWE still expects an operating result on the same level as last year, it said.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for GDF Suez, Europe’s second-largest utility by sales, in the first nine months of the year dropped 6.2 pct to 10.1 billion euros, below the 10.35 billion euros average of estimates in a Reuters poll. [ID:nLA696859]

    The company repeated it expects 2009 earnings before interest, tax, depreciation and amortization (EBITDA) to rise compared to 2008, without being more specific. EDF, the world’s biggest utility by market capitalisation, trimmed its outlook for next year.

    It now expects EBITDA to be “close to” the year-earlier level, at constant scope and exchange rates and with standard winter climate conditions. [ID:nLC696034]

    The state-controlled group, which had previously targeted moderate organic EBITDA growth, said it expected “significant growth” in core earnings only when including the acquisition of British nuclear power plant operator British Energy.

    The company’s comments come after E.ON (EONGn.DE) and International Power IPR.L on Wednesday had forecast a tentative pickup in demand for power as economies start to recover from the global downturn. [ID:nLB129832]

    EDF and GDF Suez shares both dropped 0.2 percent at 1026 GMT, CEZ shares were down 0.7 percent, while RWE stock lost 0.1 percent and the DJ Stoxx utilities index SX6P was down 0.7 percent.

    Czech power producer CEZ reported earnings before interest and taxes (EBIT) slid 12 percent to 13.6 billion crowns in the third quarter of the year missing the 15.2 billion crowns average of estimates from 12 analysts. [ID:nLC48930] [ID:nPRG003775]

    But despite the gloom in western Europe, Europe’s largest listed sector player was still able to confirm its expectations of net profit and EBITDA for 2010.

    Additional reporting by Nina Sovich in Paris and Tyler Sitte in Frankfurt; writing by Peter Dinkloh; Editing by Andrew Callus

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