MONTEL
EDF posts EUR 5.3bn H1 net loss, warns of EUR 24bn hit
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(Montel) French utility EDF saw a net loss of EUR 5.3bn in H1, while warning of a whopping EUR 24bn hit to core full-year earnings amid significantly reduced nuclear output and government measures to cap energy bills.
The decline in earnings reflected “the difficulties encountered in nuclear generation in France and, to a lesser extent, in hydropower generation, as well as the effect of the tariff shield introduced in France in 2022”, said the firm’s CEO Jean-Bernard Levy in a statement on Thursday.
The French government has forced EDF to sell an additional 19.5 TWh of regulated nuclear power output to its rivals – so-called Arenh – at EUR 46.20/MWh to year end in order to cap power bills amid skyrocketing prices.
EUR 7bn hit
Earnings took a EUR 7.3bn hit due to the measure as EDF had to make “significant [power] purchases at very high price levels” amid an energy supply squeeze in Europe.
This came amid Russia’s war in Ukraine, which created “extreme tensions on the electricity market”, said the firm.
On Wednesday, French Q4 power prices surged to a record high above EUR 900/MWh due to new Russian gas flow cuts, which compounded already tight supply.
Meanwhile, EDF’s domestic nuclear output in the January-June period dived 27.6 TWh to 154.1 TWh, due to forced outages related to stress corrosion issues at several reactors.
The utility had to revise down its output target to 280-300 TWh for the year, its lowest level in more than 30 years.
Hydropower generation also decreased 5.7 TWh to 18.9 TWh due to drought conditions.
Trading earnings triple
However, EDF’s trading arm saw a near tripling year on year in H1 of earnings before interest, tax, depreciation and amortisation to EUR 1.7bn amid the increased energy market volatility.
The company’s debt decreased EUR 0.2bn year on year to EUR 42.8bn in the year’s first half.
Nevertheless, the government intended to launch a EUR 9.7bn takeover bid in September for the 16% of the utility it did not already own, enabling the troubled firm to carry out “decisive projects in an accelerated manner”, it said last week.
The full takeover of EDF comes as the company struggles with huge cost overruns and delays to the start-up of its third-generation European pressurised reactor at Flamanville and various issues at its existing nuclear fleet.
