Former French gas monopoly Gaz de France has reported a 13% increase in net profits for the first half of its financial year having managed to offset the impact of high wholesale prices.

Net income reached a total of E1,185 million, up 13.1% compared with the same period in 2004 and up 25% compared with the net income result, pre-pension reform, for the first six months of 2004. The positive improvement was partly down to GDF’s ability to shield itself against rapidly increasing wholesale gas prices through using its pre-existing reserves.

Net sales increased by 20.3% to E11,089 from E9,214 in the corresponding period in 2004. The growth chiefly reflected increases in prices charged for petroleum products. It also reflected the 3% increase in the volume of gas sales, which rose from 385TWh to 396TWh.

The group has continued to expand its business activities outside France with international activities, chiefly based in Europe, accounting for 31.4% of the net sales generated during the first half of 2005 compared with 27.3% in the first half of 2004.

As a result of the interim figures GDF’s chairman and CEO Jean-Fran├žois Cirelli said that the company would achieve its full year targets set when it floated in July 2005.

Commenting following the first half year results, Mr Cirelli said: The Group’s objective is to further increase its customers’ satisfaction and become a leading European player in the energy market through the ambitious and profitable development of its business activities.

To become a leading player in Europe GDF has built a war chest of E17.5 billion and recent speculation has suggested that UK energy company Centrica is being lined up as a takeover target for the French gas giant.