Engie flags hit from windfall taxes and dismantling of some Belgian nuclear sites

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Engie flags hit from windfall taxes and dismantling of some Belgian nuclear sites
Credit: © Reuters.

By Scott Kanowsky 

Investing.com -- French energy group Engie SA (EPA: ENGIE ) warned that it expects net profit will be hit by as much as €1 billion (€1 = $1.065) in 2022 from European levies on additional revenues made from power production.

The company warned that taxes from Belgium, France and Italy on turnover made by non-gas electricity producers will also negatively affect earnings by between €1.1B - €1.4B next year. The rules have been described as a way to siphon "excess" sales from power firms following a recent spike in energy prices.

Engie estimates that these measures will impact net recurring income by as much as €1.4B in 2023 as well. Earnings before interest and taxes are anticipated to take a charge of between €0.7B - €0.9B in 2022 and €1.2B - €1.5B next year.

The European Union first recommended in September that the levies be placed on energy companies' extra revenues, although individual member states have chosen to implement the rule on a domestic level in various ways.

Engie said it "retains the possibility" to dispute the taxes that, in its view, do not comply with legal standards and "introduce unjustified discrimination between operators or energy sources."

Meanwhile, in a separate disclosure on Tuesday, Engie said the amount of provisions it will need to put aside for the dismantling of some nuclear power plants in Belgium would rise by an extra €2.3B for year-end 2022.

Shares in Engie dropped by more than 4%, despite the gas supplier saying it would maintain its full-year guidance for recurring net profit in the range of €4.9B - €5.5B.

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