France to pump €2bn into EDF as energy group grapples with production snags
State-controlled company plans €2.5bn rights issue to redress finances
The French government is set to pump €2.1bn into EDF as the state-controlled power group struggles with drops in production and shoulders the cost of France’s bid to cap energy bill prices.
The company said on Friday it would resort to a €2.5bn rights issue to redress its finances. Outages at several French nuclear power plants, which have forced it to slice its production outlook, amounted to a €11bn hit to core profits for 2022, EDF added.
That comes on top of an estimated €8bn in core profits wiped out by the French state’s move to cap energy bills for households and businesses at 4 per cent this year. The government said in January it would make EDF shoulder the cost of that measure in the face of soaring wholesale prices, pushing the group to sell more of its nuclear power at reduced rates to other rivals in France.
The state’s move rattled EDF’s top ranks, just as the group is set to embark on the construction of new nuclear power plants in France for an estimated €50bn — its biggest French order in decades and which also comes alongside a costly maintenance programme for older reactors.
EDF said on Friday it would embark on another round of asset sales over the next two years, aiming to raise €3bn. It plans to offer an option for shareholders to receive dividends in shares rather than solely in cash this year and next.
The group’s profit in 2021 rose almost eightfold to €5.1bn, while core profit, helped by higher nuclear power production last year and its trading business, climbed 11.3 per cent to €18bn. EDF said hits to its core profit in 2022 would still be offset in part by a positive €6bn boost from higher energy prices.
Bruno Le Maire, French finance minister, told RTL radio on Friday that he did not rule out more government measures to help consumers and businesses with high energy prices in 2023.