By Tara Patel
Nov. 13 (Bloomberg) -- GDF Suez SA, the world's second- biggest utility, said nine-month profit rose 19 percent on higher power and natural-gas prices.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, rose to 10.4 billion euros ($13 billion) from 8.7 billion euros a year earlier, the company said today in an e-mailed statement. That beat the median forecast of 9.99 billion euros in Bloomberg survey of analysts.
Revenue rose 18 percent to 58.8 billion euros, also more than a 57.7 billion-euro analyst forecast.
GDF Suez confirmed its full-year Ebitda will grow more than 10 percent this year in spite of a ``high comparison'' in 2007 due to cool weather and liquefied natural gas trading. The utility also warned that state-set gas distribution prices in France don't ``totally reflect'' supply costs.
The results are the second for the utility since Gaz de France SA and Suez SA merged in July. The combined company is seeking to challenge Electricite de France SA by gaining more power customers in the domestic market. The company has said it may unveil plans for a so-called future generation nuclear reactor in Western Europe next year, possibly in France.
The shares have dropped about 23 percent since their trading debut July 22.
Debt Rises
GDF Suez net debt rose to 23.2 billion euros from 18.8 billion euros at the end of June, the statement said. The increase was due in part to 3.5 billion euros in investment over the period and 0.4 billion euros spent buying back shares in September.
The utility has gained 400,000 power customers in France since EDF lost its monopoly on household supply in July, 2007, the statement said. EDF has about 25 million customers.
``There was growth in the individual customer and wholesale markets but a downturn in the industrial customer market due to difficult price conditions,'' GDF Suez said. The company wants to gain as much as a fifth of the French power market by combining sales of gas and electricity supply.
French utilities' earnings are capped by regulated household power rates that are among the lowest in Europe. The Finance Ministry in August allowed regulated power rates for households and small businesses to rise by as much as 2 percent. Charges were allowed to climb 6 percent for mid-sized businesses and 8 percent for large consumers. Natural-gas tariffs were allowed to climb by an average of 5 percent.
Price Regulation
Gaz de France, which has 10 million household customers in France, said price regulation cost the company 179 million euros in lost revenue in the first half as supply costs increased. The government owns 36 percent of GDF Suez.
GDF Suez like-for-like revenue from exploration and production increased 58 percent to 1.39 billion euros due to a rise in oil prices and a 21 percent increase in production, the statement said. The company started pumping from new assets in the Netherlands and Norway and drilled six successful wells out of 11.
The company is seeking to double gas reserves to 1.5 billion barrels of oil equivalent from 2006 levels, mainly through external growth. It also aims to boost European gas- storage capacity by more than 35 percent by 2013.
GDF Suez SA last month paid 1.1 billion euros for offshore fields and pipelines held by Nederlandse Aardolie Maatschappij BV, to become the largest oil and gas operator in the Dutch North Sea. On Sept. 2, it agreed to buy U.S. hydropower producer FirstLight Power Enterprises Inc. from Energy Capital Partners, making it the third-largest supplier to U.S. businesses.
GDF Suez backs the building of so-called third generation nuclear reactors along the lines of the Evolutionary Power Reactor, or EPR, developed by Areva SA. The company is also targeting the Middle East for nuclear energy and is bidding to build a plant in Abu Dhabi with Areva and Total SA.
To contact the reporter on this story: Tara Patel in Paris at Tpatel2@bloomberg.net
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