French utility Engie reported stronger-than-expected first-half earnings on Friday, driven by robust natural gas trading and higher revenue from electricity transmission fees, sending its shares up about 5%.
The company, Europe’s largest gas network operator, posted earnings before interest and taxes (EBIT), excluding nuclear activities, of €5.3 billion for the January-to-June period, marking a 3.3% increase from a year earlier and exceeding market expectations.
The stronger performance prompted Engie to raise its full-year EBIT guidance, excluding nuclear, to between €9.2 billion and €10.2 billion, compared with its previous forecast of €8.7 billion to €9.7 billion.
The improved outlook came despite warmer weather and lower rainfall, which weighed on gas demand and reduced hydropower generation during the period.
Analysts welcomed the results, with RBC’s Joseph Pepper saying the performance was strong across the business and that the upgraded guidance reflected resilience in challenging market conditions.
Chief Financial Officer Pierre-Francois Riolacci said the company’s energy management division benefited from heightened gas price volatility linked to tensions in the Middle East.
However, Riolacci noted that the gains from gas trading were modest compared with the exceptional profits generated during the 2022 European energy crisis triggered by disruptions to Russian gas supplies.
Investors reacted positively to the results, pushing Engie shares up 5% to €27.37 in morning trading.
The stock has gained around 24% so far this year, reflecting growing investor confidence in the utility’s earnings outlook and operational performance.