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Égáz-Dégáz targets 25% profit rise in 2007 after poor 2006

The Hungarian holdings of French natural gas company Gaz de France (GdF) are expected to produce a 12% rise in revenues and a 25% increase in pre-tax profit in 2007, following shrinking profits in 2006 that were the result of various negative tendencies, the company announced in a statement.

"Despite our difficulties, we are planning in 2007 to maintain our market positions and attempt to improve them through Édenergia Kft," which sells gas on the free market, Gaz de France's Hungarian gas distribution company Égáz-Dégáz Zrt said in a release published late Tuesday.

GdF companies in Hungary posted combined pre-tax profits of Ft 3.1 billion in 2006, a decline of 45% compared to the previous year, as operations were affected negatively by tariff changes during the year, as well as tax changes from September 2006, a change in the state's gas compensation system for consumers and the loss of several industrial customers who entered the free market. Égáz-Dégáz, which handles gas sales to households and industrial users on the regular market, also said that gas sales were lower than planned due to a milder than usual winter.

The company sold 2.117 billion cubic meters of gas last year, down 11% year on year, although this was offset slightly by 33 million cubic meters sold on the free market by Édenergia, which stared operations in 2006. Édenergia supplied gas to four free-market clients at the end of 2006. Total revenues of the group rose 16% to Ft 161.5 billion, while the plans for 2007 indicate a target of more than Ft 180 billion. Pre-tax profit, meanwhile, is set to grow to Ft 3.88 billion.

In other plans for 2007, the company is banking on the free-market sales of Édenergia to offset an expected further drop in gas sales on the regular market, which is seen resulting from further users leaving for the free market, and higher gas prices due to a changed state subsidy system cutting usage by households. GdF said it expects Édenergia's sales to reach 10% of Égáz-Dégáz's in 2007, up from just 2.5% last year. (