Suez Environnement (SEV), the world’s second-biggest water company, may bide its time and look to buy assets that could come up for sale in about two years.
“There will be lots of assets in 2015 and 2016 that could come on the market and could interest us,” Chief Executive Officer Jean-Louis Chaussade told an investor conference today in Paris. “If we are cautious in 2013 and 2014 we will come out a winner.”
The utility doesn’t expect rapid growth in the next two years and will “protect its balance sheet,” Chaussade said. Next year’s investment could be similar to the 1.2 billion euros ($1.6 billion) the utility set aside for this year, he said.
Suez Environnement, which has pledged to maintain its dividend this year, has taken provisions worth about 300 million euros on a delayed Australian desalination plant. The utility, like Veolia Environnement SA (VIE), is grappling with slower demand for industrial waste collection in Europe after manufacturers shuttered factories to survive the economic slowdown.
The utility’s revenue next year is expected to remain about the same or a little higher than 2012, Chaussade said today. He reiterated full-year financial targets.
Suez Environnement, which is 34 percent-owned by GDF Suez (GSZ) SA, said earlier this year that the impairment on the Australian desalination plant, combined with an “uncertain” economic environment, would leave earnings before interest, taxes, depreciation and amortization unchanged in 2012.
The Melbourne plant is expected to begin commercial operations on Dec. 18 following a test period, Chaussade said. The utility wants to get back about half the provisions passed for its development.
In Spain, water prices are rising as much as 3 percent while investment in infrastructure has slowed, he said.
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