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Finance & Investment This week Engie profit fall spurs transformation plan French energy giant plans multi-billion euro programme of disposals and site closures Engie has announced a three- year transformation plan that will see it embark on a multi-billion euro programme of disposals and site closures, cutting costs by €1 billion across the business by 2018, as its 2015 results came in below expectations. The French energy giant reported 2015 revenues of €69.9 billion, down 6.4 per cent year on year (2014: €74.7 billion). It has cut the dividend to €0.70 in 2017-18, from €1 in 2016. Ebitda was down 7.2 per cent to €11.3 billion (2014: €12.1 billion). The transformation plan will refocus the company on "low-carbon activities, integrated customer solutions and activities not exposed to commodity prices", it said. Engie will reduce its exposure to commodity prices with a programme of disposals, partnerships and/or site closures that will reduce its net debt by €15 billion. It outlined a capex programme of €22 billion over 2016-18, €7 billion of which will be on maintenance and at least €500 million on innovation. Chairman and chief executive Gerard Mestrallet said: "In a deteriorated market context, Engie launches today an ambitious three-year transformation plan to become leader of the world energy transition. This plan aims at redesigning the portfolio of activities of the group, thanks to a €22 billion capex programme and a €15 bil- lion portfolio rotation programme, and at improving its risk profile by reducing its exposure to commodity prices. We want to focus on low-carbon activities and on integrated customer solutions, while improving the efficiency of the group." EB ELECTRICITY SPEN: subsidy cuts could alter strategy SP Energy Networks (SPEN) has said changes to subsidy arrange- ments for onshore wind have the potential to change its plans for a new high-voltage transmission network in the Dumfries and Galloway area. The company has concluded the first round of a public con- sultation on the proposed 400kV network from Auchencrosh to Harker in Cumbria to increase capacity in the area, required for Scotland to meet its renewable energy targets. SPEN said it will be under- taking further analysis with National Grid to determine the extent to which subsidy cuts and the future mix of power generation in Scotland could alter its plans before launching the second phase of consultation this summer. It said the analysis is needed to "ensure that the most appro- priate proposal is taken forward to the next stage of the process". WATER Fund infrastructure, says NI Water chief Northern Ireland Water chief executive Sara Venning has urged the water sector to "raise the profile and the importance" of funding infrastructure as a priority for Northern Ireland. Speaking at WWT's Water Northern Ireland Conference in Belfast, Venning said: "We have a shareholder that needs to find the funds. All of us have a job to do to help ministers see that this is important." She said that, due to a lack of funding, the company had been unable to sign up to a medium- term plan – a key requirement for a regulated utility: "We all know that that's an inherently inefficient way to run a capital- intensive business such as ours." ENERGY Iberdrola to invest in the UK as profits rise Spanish energy giant Iberdrola has said it plans to invest €8.3 billion in the UK by 2020, as it reported rising profits in its 2015 results. The Scottish Power owner said as well as ploughing money into transmission and distribu- tion infrastructure, it expects to bring online more than 1GW of offshore and 450MW of onshore wind projects in Britain. Revenues from Scottish Power's energy wholesale and retail division were down by 1.1 per cent year on year to €7.6 billion. Ebitda fell by 7.9 per cent to €420 million. Iberdrola's overall pre-tax profits were up 4.1 per cent to €2.4 billion (2014: €2.3 billion) and Ebitda was up 4.9 per cent to €7.3 billion (2014: €7 billion). Engie plans "to focus on low-carbon activities" 14 | 4TH - 10TH MARCH 2016 | UTILITY WEEK Stock watch 10 9 8 7 EON SHARE PRICE, 2 FEBRUARY - 1 MARCH 2016 2 Feb 9 Feb 16 Feb 23 Feb 1 Mar 13 12 11 10 RWE SHARE PRICE, 2 FEBRUARY - 1 MARCH 2016 Shares at German energy giants Eon and RWE continued to fall in February as the markets awaited their full year 2015 results next week. RWE suffered the most as markets responded to a suspension of the dividend and a €2.1 billion writedown of traditional generating assets earlier in the month. The company is expected to announce details of a comprehensive restructure of UK arm Npower when it reports on 8 March. € € 2 Feb 9 Feb 16 Feb 23 Feb 1 Mar