GDF Suez hit by mild start to winter GDF Suez, the world's largest independent power producer by sales, has reported a sharp fall in profits for 2011 as it suffered from a mild start to the winter and a freezing of gas prices in France. Shares in the Paris-headquartered company fell by almost 4 per cent after it said net income was €4bn last year, compared with €4.62bn in 2010. While GDF has been buoyed by the recent freezing weather in Europe, which boosts demand for its gas, it has estimated that a dispute with the French government over domestic gas prices cost it almost €400m in 2011. The dispute with the French state, which still owns more than 35 per cent of GDF, has been resolved after the government agreed to lift the gas tariff by 4.4 per cent at the start of 2012. The company is also involved in a costly standoff with the Belgian government, which is increasing a yearly tax on nuclear energy suppliers, namely GDF's Electrabel, from €252m to €550m. Belgium has also said it will not honour a previous agreement to renew three GDF nuclear plants, which will probably now exit service 10 years earlier than expected. The company said it expected net recurring income to be between €3.5bn and €4bn this year. It was €3.5bn in 2011. There was better news on GDF's efforts to cut net debt, which was reduced by €4bn to €37.6bn at the end of 2011. Capital spending is running at €11bn yearly as GDF expands its liquefied natural gas business and its presence in Asia, but it is also in the middle of a €10bn asset disposal programme to keep its ratio of net debt to earnings before interest, tax, depreciation and amortisation below 2.5 times. It said it expected net recurring income to increase to €5bn by 2015, depending on the weather and a stable regulatory regime in Europe and a stable debt level that would allow it to increase the dividend between 2013 and 2015. The company's domestic French business accounted for most of the decline in its earnings. Ebitda at its Energy France unit fell by a half because of the exceptionally mild winter before Christmas and the tariff freeze. The combined impact on ebitda from these two factors was €900m. On a group level, ebitda increased by 9.5 per cent €16.5bn thanks to the contribution from the recently acquired International Power. Sales rose 7.3 per cent to €90.7bn.