EDF sees 2018 as 'year of the rebound' for finances
EDF expects its profit to bounce back this year thanks to higher power prices and increased availability of its French nuclear units following prolonged stoppages for safety inspections in 2017.
The group, which is majority-owned by the French government, reported a 2.2% decrease in revenues last year to EUR 69.6 billion ($86.6 billion), with profits down 16% to EUR 13.7 billion, excluding the impact of asset sales. It said group results had declined due to lower prices in almost all the regions where it operates and that it had lost 960,000 customers, which took EUR 341 million off its profit.
EDF's CEO and chairman, Jean-Bernard Lévy, said the results were in line with expectations and that the group's profitability in the face of a "difficult market context" was evidence of EDF's financial strength.
"2018 will be the year of the rebound on solid bases," Lévy said.
During a conference call, however, he said the predicted decline in nuclear generation in France next year meant the group would increase its target for cost savings to help offset the impact on revenue.
EDF, which has an 85% share of the French electricity market, had extended unplanned outages as well as longer-than-expected maintenance outages last year at several of its 58 nuclear reactors in France, while the country's nuclear regulator ordered its four reactors in Tricastin to be shut down for months for safety reasons.
The outages led to a 21% drop in income from French electricity generation, to EUR 4.8 billion, as nuclear power output fell below the company's initial target of 390-400 terawatt hours - by 1.3% to 379.1 TWh. This year, EDF forecasts output of at least 395 TWh.
According to Reuters, Lévy said during a conference call that nuclear output would be lower again in 2019, when its Fessenheim nuclear plant will be permanently closed and its new reactor in Flamanville will still be ramping up to full production. Next year will also see several large-scale maintenance outages, he added.
The company included "strengthening of the French nuclear industry" among its highlights for 2017. This comprised the acquisition of Framatome; regulatory approval for the resumption of manufacturing of forged components at the Creusot site; the creation of Edvance; and "progress on track" with the Flamanville 3 project. It also noted the government's postponement of the 2025 target on reducing the share of nuclear power from 75% to 50% ahead of the multi-year energy plan.
Profits in its UK business, which includes EDF Energy, fell by a third to EUR 1.035 on a decrease in sales of EUR 579 million to EUR 8.68 billion. The fall was attributed partly to the fact UK customers pay their bills in pounds, but the company reports its results in euros. EDF said the decline of the pound against the euro had cost it EUR 608 million. EDF's nuclear power output in the UK was down 1.8% to 63.9 TWh.
Researched and written
by World Nuclear News
