Back to basics

10 January 2003

The French utility s share price jumped on the news. It now looks up on management promises. The next step is delivery. Expect other European utilities think RWE, E.ON, EDF to say the same. The new mantra? Growth is out. Free cash flow is in.

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Context News

Suez said it would cut its net debt of E27bn by a third through asset disposals and cost cuts as part of a broad strategic plan that would see the French utility conglomerate focus on its core energy, waste and water operations.

The group, which warned that provisions and writeoffs related to the restructuring would trigger a net loss of E900m for 2002, said it would dispose of its holdings in Fortis, TotalFinaElf and Axa over the next two years.

Suez denied that the restructuring was the result of short term financial pressures as it has more than E6.5bn in cash, plus another E3.5bn in noncore listed shareholdings.

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