Gaz de France hit by warm winter

GDF's merger with Suez depends on the outcome of French elections

French energy firm Gaz de France (GDF) has predicted that earnings will be flat this year after what it described as the warmest winter for 50 years.

The comments came as it released record 2006 profits, with net profit up 29% to 2.3bn euros ($3.0bn; £1.6bn).

GDF said the warm 2006/07 winter would have weighed on prices and activity levels in the first few months of 2007.

The group reaffirmed its commitment to merging with another French utility, Suez, despite legal delays.

The merger was agreed in February 2006 and was seen by many as a way of seeing off a possible bid from Enel.

A decision by France's constitutional court has delayed the merger until at least July, which means that whether it happens will depend on who wins the French elections.

The socialist presidential candidate Segolene Royal opposes the merger and even the centre-right candidate Nicolas Sarkozy is reported to be lukewarm about the deal brokered by his own government.