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GDF Suez takes write-downs of €14.9B

  • GDF Suez (GDFZY) swung to a net loss of €9.3B in 2013 from a restated profit of €1.54B a year earlier after taking write-downs of €9.1B, mostly on European power assets, and after booking goodwill charges of €5.8B.
  • GDF took the writedowns, which reflect soft demand and increased competition from coal, because "the change in environment in Europe is now serious and long-lasting."
  • Net recurrent profit -10% to €3.4B.
  • EBITDA dropped to €14.8B from €17B under new accounting rules.
  • Expects net-recurrent profit of €3.3-3.7B in 2014.
  • Shares +5% in Paris.
  • GDF maintained a dividend of €1.50 a share for 2013 but said it would only pay a minimum of €1 from 2014-2016. (PR)

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Comments (4)
  • Veritas1010
    , contributor
    Comments (1633) | Send Message
     
    This is rough news for those who have been long term investors in GDFZY. A haircut of 1/3rd the dividends for 2 years is very painful. I suppose it maybe time to examine cost basis and bail on the right day, will have to examine yield on cost.

     

    Europe never ceases to disappoint the investment community.
    27 Feb 2014, 11:14 AM Reply Like
  • Strike
    , contributor
    Comments (1474) | Send Message
     
    Why did the shares shoot up on this bad news? And why did Telefonica shares drop despite a tripling in net profits? These markets are crazy! I sold GDF and bought Telefonica today.
    27 Feb 2014, 02:18 PM Reply Like
  • Debutant
    , contributor
    Comments (2447) | Send Message
     
    Strike,

     

    You,too?

     

    I was away all day yesterday.
    I noticed the share price fall only this morning and immediately added to Telefonica at 11.15Eur.

     

    Don't tell this to anyone: I almost bought it earlier in the week@ 11.40's, with the expectation of a good earnings report. Sooooo glad that I missed(!) that opportunity (!) then.

     

    Enjoy, my friend.
    28 Feb 2014, 06:07 AM Reply Like
  • Strike
    , contributor
    Comments (1474) | Send Message
     
    I know, it's crazy, TEF's debt is a little on the high side but it has everything else going for it. The stock should have risen 10 % on the tripling of profits,not dropped!

     

    As for GDF Suez, I believe there will be opportunities to repurchase in the EUR 15.50 - 16.50 area. Why not trade the 10 - 15 % swings? You do this 3 times a year and you're making more than with Buy&Hold, and in much shorter time frames?

     

    I also sold Belgacom this a.m. on very weak earnings and saturation of the Belgian market. My cash reserves are now up to 20 %. At S&P 2000 I expect to be 50 % cash based on current GTC sell orders. A stock has to be a screaming buy (low P/E, low PEG, good Balance Sheet and free cash flow) for me to even consider buying at this stage. I am lightening all the way up. I still believe the market will rise, but the easiest profits to be made this year will be on every 5 - 10 % correction.
    28 Feb 2014, 07:31 AM Reply Like
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