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Clean sweep as European utilities beat analyst estimates for H1'19

The first half of the year saw Europe's largest electric utilities outperform against analysts' expectations. But while all 15 companies analyzed by S&P Global Market Intelligence beat their EBITDA consensus estimates in the period, fewer than half did so by more than 2%.

The majority only outperformed by a slim margin, with six of the 15 — including Enel SpA, Europe's largest utility by market cap — coming within a percentage point of their first-half EBITDA estimates as projections landed broadly in line with reported figures.

Enel beat estimates by a modest 0.47% in the period, placing it some way behind Denmark's Ørsted A/S, which ended 11.63% above the consensus to become the only company of the 15 to outperform by double digits in the first half. Ørsted's results for 2019 to date were boosted by the commissioning of several new offshore wind farms in Germany and the U.K., the utility said.

Spain-based Iberdrola SA outperformed after seeing a jump in profits in the first half, with the group also raising its expectation for net profit growth for the full year, mostly due to its faster-than-expected commissioning of new renewables capacity.

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France's Engie SA and Czech utility CEZ a.s. both outperformed in the first half by a little over 3.5%. In Engie's case, it saw growth in its energy management and renewables businesses along with a recovery in its nuclear operations, CEO Isabelle Kocher said July 30.

First-half EBITDA at Electricité de France SA was €8.35 billion, with the group attributing its year-over-year growth to favorable market conditions in France and strong performance by its trading business. This came as Jean-Bernard Lévy, the company's chairman and CEO, confirmed on a July 26 earnings call that the company would be pushing back the commissioning date of its flagship nuclear project in France by at least another three years.

Germany-based Innogy SE's earnings came ahead of the planned breakup of the company that is expected to be complete after the summer. The group's first-half results paint differing pictures for RWE AG, which will take over Innogy's renewables business as part of a €40 billion asset-swap deal, and E.ON AG, which will assume its grid and retail units.

For its part, while E.ON outperformed estimates by 0.87% in the first half, its overall earnings declined, mostly due to a steep drop in its U.K. retail business, which had suffered from a regulatory price cap introduced in January. CFO Marc Spieker said Aug. 7 that the company can avoid slipping into a net loss in the U.K., and it "clearly [expects] black numbers" for the whole year.

Elsewhere, it was a decent period for Finland's Fortum Oyj, which outperformed analyst expectations by 7.75%, due partly to higher power prices and better hydro availability. Company CEO Pekka Lundmark confirmed on a July 19 earnings call that Fortum had restarted talks with Uniper SE in an effort to gain control of the German power producer.