Theolia Falls After Reporting First-Half Loss, Cutting Target

By Tara Patel

Sept. 3 (Bloomberg) -- Theolia SA, the French wind-power company part-owned by General Electric Co., plunged after reporting a first-half loss and cutting a target for full-year operating profit on a plan to sell fewer power installations.

Theolia fell as much as 1.94 euros, or 14 percent, to 12.11 euros, its lowest since December 2006, and traded 10 percent down at 12.69 euros at 9:39 a.m. Paris time.

The net loss was 25.3 million euros ($36.6 million), compared with net income of 6.2 million euros a year earlier, the Aix-en-Provence-based company said today in an e-mailed statement. Earnings before interest, tax, depreciation and amortization rose to 8.6 million euros, compared with a 3.3 million euros loss a year earlier.

The company cut its 2008 Ebitda outlook to ``a minimum'' of 20 million euros from a forecast of 55 million euros to 65 million euros, saying it would sell less wind capacity. Chief Executive Officer Jean-Marie Santander will relinquish that role and remain as chairman, the company also said. They are seeking a new chief executive.

``We will gain long-term visibility by keeping our megawatts,'' Santander said in an interview today, adding that the change was promoted by a rise in wind-power rates in many countries, including Germany. Theolia ``is interested and continues to hold talks'' on acquisitions, he added.

The loss in the period was due in part to an increase in the cost of financing its debt, which rose to 398 million euros from 216 million euros at the end of 2007.

Interest Gains

Interest in electricity production from renewable-energy sources has gained as power companies seek to burn fewer fossil fuels such as coal and natural gas, blamed for global warming.

Alternative-energy generation has also been boosted by a European Union target to cut greenhouse-gas emissions 20 percent by 2020 from 1990 levels. Theolia has long been the subject of speculation that it's a takeover target by utilities seeking to increase their renewable-power capacity.

Theolia's wind-power capacity in operation totaled 661 megawatts at the end of June, with 474 megawatts of projects to be commissioned by the end of 2009, the company said.

Last year, Theolia acquired 165 megawatts at seven wind farms in Germany from GE Energy Financial Services and 50 megawatts in Morocco from Cie. Eolienne du Detroit. It bought the GE Energy assets with cash and shares.

New Capacity

Theolia had 2,796 megawatts in development at the end of June, including 199 megawatts under construction. The company maintained plans to boost the capacity it operates to 2,000 megawatts by 2011 and said it has secured the supply of 1,000 megawatts of turbines.

``We will try to keep a maximum of wind capacity for our own operations depending on our ability to do this and regulations,'' Santander said. The company will be obliged to sell some capacity in certain cases, he said.

The move would mark a change in strategy from Theolia's policy of selling about half its wind-energy capacity.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net