EDF Profit Falls on Lower Electricity Prices, Deregulation
July 29 2016 - 4:20AM
Dow Jones News
PARIS—French state-controlled power utility É lectricité de
France SA said first-half profit fell as a result of lower
electricity prices in its home country and losses of market share
related to the deregulation of the country's market.
Net profit dropped 17% to €2.08 billion ($2.31 billion), while
revenue fell 5.7% to €36.66 billion, EDF reported on Friday.
Earnings before interests, taxes, depreciation and amortization
fell 2.2% to €8.94 billion.
The net profit was lower than the €2.27 billion forecast by
Cosma Panzacchi from Bernstein Research.
EDF Chief Executive Jean-Bernard Lé vy attributed the decline to
a drop in electricity prices on the wholesale market and a loss of
nearly 25% of a category of customers—small businesses and public
institution customers—who were allowed in recent months to switch
from the former monopoly to rival operators.
Separately, the company said it would extend the depreciation of
its fleet of 900 megawatt reactors in France to 50 years instead of
40 years.
EDF is in the process of raising €4 billion in fresh equity as
the utility needs to embark on expensive new projects deemed
political priorities. The government will inject €3 billion in the
capital increase.
EDF plans massive investments in the coming years, including the
acquisition of a controlling stake in Areva's nuclear reactor unit
and an 18 billion-pound ($23.7 billion) plan to build nuclear
reactors in the U.K.
The company has said it would cut costs and sell assets to raise
additional cash to finance the investments.
On Thursday it announced it had opened exclusive talks with
French state-financial house Caisse des Dé pô ts et Consignations
and French insurance company CNP Assurances SA to sell them a 49.9%
stake in its grid operator RTE in a deal that would value RTE at
€8.45 billion.
Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
July 29, 2016 04:05 ET (08:05 GMT)
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