France’s EDF posts €5.3bn loss ahead of renationalisation
Energy group warns of €24bn hit to full-year core profits from output problems
EDF has posted a €5.3bn first-half loss, weeks before the French utility is due to be renationalised and after outages at some of its nuclear plants sent its electricity production plummeting.
The company on Thursday warned its core profits for the whole of 2022 would take a deeper hit than previously flagged of €24bn from its output problems, compared with a previous forecast of €18.5bn.
EDF, which is 84 per cent controlled by the French state and which operates France’s 56 nuclear reactors, has been struggling with corrosion issues at some plants that have forced it to carry out checks and closures. The group was also made to foot the bill for the government’s bid to cap electricity prices for households.
EDF said its first-half sales had risen 67 per cent year-on-year to €66.2bn. However, the group has been forced to buy supply on expensive wholesale markets, and its earnings before interest, taxes, debt and amortisation fell to €2.7bn, down almost 75 per cent from the first half last year.
On top of falling core profits, EDF said it had also recorded a negative change in the value of financial instruments of €3.8bn.
It recorded negative cash flow of nearly €4bn, a deterioration from the minus €240mn of a year earlier.
EDF, which has long been lumbered with a large debt pile, is due to return to government hands by around October through a tender offer of close to €10bn to buy out minority shareholders and convertible bonds.
The French government has said it wants to take full control of EDF again to be in a better position to face looming investments in new nuclear reactors, and to be able to move faster on some projects.
EDF’s deepening financial problems had also precipitated matters, analysts and people close to the group said, adding that the company would probably require further capital increases.