Suez profit drops after asset sale boosted previous results

Suez Environnement, the water and waste company shortening its name to Suez, said first-­half profit fell 45 percent as asset-sale proceeds from 2014 weren’t repeated and the waste-treatment business remained sluggish in Europe.
Net income slumped to 141 million euros (USD156 million) from 255 million euros a year earlier, when the utility benefited from selling an asset in Macau. Stripped of that gain, profit rose 11 percent, Suez said yesterday in a statement.
The Paris-based company has expanded to Spain and Italy as well as Africa and the Middle East to boost profitability amid pricing pressures at home and a slower European industrial-waste business. Chief Executive Officer Jean-Louis Chaussade says Suez has “financial flexibility” to make acquisitions and has made China a priority.
“I am not predicting a slowdown” in China, Chaussade said on a conference call. The utility has a waste and water partnership with Chongqing Water Group and is counting on the government’s continued focus on environmental improvements.
Earnings before interest, taxes, depreciation and amortization were 1.29 billion euros in the first half, in line with the 1.28 billion-euro average estimate of seven analysts surveyed by Bloomberg. Ebitda in the European waste division dropped 3.1 percent.
“The second quarter was better than the first and European volumes rose slightly,” Chaussade said. “We hope the third quarter will follow this trend.”
Net financial debt advanced to 8.02 billion euros from 7.7 billion euros at the end of March. Cost savings were 70 million euros in the first half, while free cash flow totaled 322 million euros. The utility confirmed 2015 financial targets.
Suez expects “positive” organic Ebitda growth this year, at least 4 percent organic Ebit growth and at least 3 percent growth in like-for-like revenue. Tara Patel, Bloomberg