French power operator GDF Suez (GSZ.FR) Monday posted 2.1% drop in first-quarter earnings before interest, tax, depreciation and amortization, or Ebitda--due to lingering economic difficulties in Europe and lower energy commodities prices--but the decline was a less-than-expected and the group maintained its full-year targets.

In the first quarter, GDF Suez's Ebitda dropped to EUR5.2 billion from EUR5.3 billion a year earlier, slightly above expectations of EUR5 billion in a Dow Jones Newswires survey of eight analysts.

The economic environment remained depressed, with unusually cold weather in the Northern hemisphere over the winter not enough to boost sales, as revenue in the first quarter fell 6.8% to EUR23.8 billion from EUR25.56 billion a year earlier. Analysts had forecast revenue of EUR23.87 billion.

GDF Suez said revenue generated by its global gas and LNG business dropped 19.2% in the latest quarter, to EUR6.8 billion from EUR8.41 billion a year earlier, reflecting lower short-term sales, falling natural gas prices and lower sales to major European customers.

In the first quarter, national balancing point prices, a standard for U.K. natural gas prices, dropped 31% to EUR12.9/MWh from EUR18.6/MWh a year earlier, GDF Suez said.

The group also suffered from a tariff shortfall in the first quarter in France and a new regulatory framework from April 1 should offer it better tariff increase prospects, enabling positive margins in future.

GDF Suez maintained its full-year guidance and said it still sees Ebitda growth in 2010 and Ebidta up 15% in 2011 compared with 2009.

Part of the projected rebound in 2010 and 2011 will come from the group's cost efficiency plan called Efficio, the group's Chairman and Chief Executive Gerard Mestrallet said during the annual meeting Monday, adding that 2011's advance should be stronger than this year's.

Gains contributing to the Ebitda made through Efficio in 2009 were higher than expected to EUR750 million, from initial expectations of EUR650 million.

Efficio's targets have been increased and now the group plans EUR1.25 billion of synergy and performance gains this year, from an initial target of EUR1.1 billion. It also expects gains of EUR1.95 billion in 2011 from a previous goal of EUR1.8 billion.

Net debt at the end of March stood at EUR30.3 billion, slightly up from EUR30 billion at end of 2009.

The group announced an interim dividend for 2010 at EUR0.83 per share and Mestrallet stressed that dividends in both 2010 and 2011 would be stable-to-higher than in 2009.

Mestrallet said the group's long-term incentives scheme for managemenet would resume from 2010, after he and his co-CEO Jean-Francois Cirelli both declined stock-options since the merger that created the group in 2008.

Asked to assess the update, a Paris-based trader said: "Sales are in line, and Ebitda is better than expected. The 2010 interim dividend is also above what we expected, so these are all good news."

Investors seemed to agree and at 1455 GMT the company's shares were trading up 2.4% at EUR27.43, outperforming a 0.5% drop in the CAC-40 benchmark index.

As far as the group's plan to tie-up with or buy U.K.-based power distributor International Power Plc (IPR.LN), GDF Suez made no comment. In January, talks with a view to a merger were initiated between the two companies but aborted due to leaks to the media.

GDF Suez also didn't comment on the decision over the weekend to nationalize energy assets in Bolivia .

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