U.S. News

Suez Posts 43.5% Jump in Net Profit for 2006


French-Belgian energy, water and waste group Suez on Thursday posted a 43.5% jump in net profit for 2006 on higher wholesale power prices and promised investors new profit records in coming years.

The company, which announced plans to merge with French state-owned gas company Gaz de France in February a year ago, said net profit rose to 3.61 billion euros ($4.74 billion) in 2006, from 2.51 billion euros in 2005.

That beat the company's own forecast of "close to" 3.5 billion euros (US$4.6 billion) and market expectations of ??3.45 billion ($4.53 billion), according to five analysts' estimates polled by Dow Jones Newswires.

Suez said it will propose a dividend of 1.20 euros ($1.58) a share for 2006, up 20% from the previous year, and promised it will distribute more than 50 percent of recurring net profit, excluding capital gains, starting in 2007.

Suez reiterated that merger plans with GDF are still a priority even though they have been suspended until after French presidential and legislative elections in April and May. It said it will simplify its structures by buying out the 1.38% remaining stake it doesn't already own in its Belgian electricity unit Electrabel, in a 445 million euros ($584.51 million) offer.

It also decided to sell 100 percent of Tractebel assets to Electrabel, which will hold all the energy assets of the group.

Recurring operating profit rose to 4.49 billion euros ($5.9 billion) in 2006, from 3.9 billion euros in 2005, the company said.

The utility company said it will boost investments to 15 billion euros ($19.7 billion) for the 2007-2009 period, up 50% from 10.2 billion euros in the 2004-2006 period, notably to build up its energy production capacity.