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France's Veolia, about to buy Suez, posts higher Q1 profits

France's Veolia, about to buy Suez, posts higher Q1 profits
France's Veolia, about to buy Suez, posts higher Q1 profits   -   Copyright  (c) Copyright Thomson Reuters 2021. Click For Restrictions -
By Reuters

PARIS (Reuters) – French utility Veolia, which last month agreed a 13 billion euros ($15.6 billion) merger deal with rival Suez, posted higher first quarter earnings on Wednesday and kept its 2021 financial outlook.

“Veolia is off to a flying start in 2021. This excellent performance comes at a historical moment for our group”, Veolia Chairman and Chief Executive Antoine Frerot said in a statement.

In April, Veolia finally struck a merger deal with Suez after months of wrangling between the two French waste and water management companies.

“On April 11th, we signed an agreement to purchase Suez group and to create the undisputed world champion of ecological transformation,” Frerot said.

Veolia reported earnings before interest, tax, depreciation and amortisation (EBITDA) for the first quarter ending March 31 of 1.078 billion euros, up from 970 million a year earlier. Revenues rose 2 percent from last year to 6.81 billion euros, while net income jumped by 58.7 percent to 186 million euros.

“Despite the continued impact of sanitary crisis in the beginning of the year, Veolia will more than offset 2020 and deliver strong results growth in 2021”, the group said.

For this year, Veolia is targeting revenues superior to the 2019 level, an EBITDA above four billion euros, and a net financial debt below 12 billion euros – versus 13.1 billion at the end of Q1 – at a “pre-crisis health policy”.

Suez also reported rising sales and core profits for the first quarter, boosted by recycling activities.

“This combination, which should be finalized by the end of the year, opens up great development prospects at a time when environmental priorities have never been higher on the agenda,” added Frerot, commenting on the Veolia/Suez deal.

The new combined group will generate annual revenues of 37 billion euros, with a staff of 230,000 employees.

($1 = 0.8320 euros)

(Reporting by Benjamin Mallet and Benoit Van Overstraeten; Editing by Sudip Kar-Gupta)