Profits down at EDF amid ‘intense competition’ and lower nuclear prices
FRENCH utility giant EDF has suffered a drop in half-year profits amid rising competition, unexpected outages and lower nuclear energy prices across the UK.
The energy provider saw adjusted earnings tumble 21.8% to 6.9 billion euros (£6.1 billion) in the six months to June 30, while net income dropped 3.7% to 2 billion euros (£1.7 billion).
Sales fell 2.6% to 35.7 billion euros (£31.9 billion).
A breakdown of regional operations showed that its UK operations suffered the biggest drop in earnings for the period, falling 34.4% to 627 million euros (£560 million) due to the ‘significant impact’ of lower nuclear prices, as well as a drop in residential power use amid milder weather.
The UK is the company’s second largest market, with power stations at sites including near Lancaster, Dungeness, Nottinghamshire and Scotland’s east coast.
Its French operations have also been hit by outages affecting a number of reactors. EDF reported a 28.9% drop in earnings from its national generation and supply activities, and a 14% drop from its regulated activities.
EDF added that ‘intense competition’ also hit the business.
Chairman and chief executive Jean-Bernard Levy said: “In an unfavourable market context and in line with its forecasts, the group is continuing to implement its performance plan and maintains its annual objectives.”
The company has embarked on a turnaround plan and an asset disposal programme, which it said have already resulted in a 2.2% drop in operating expenses compared to the first half of 2016.
EDF has also suffered from the rising costs of building the Hinkley Point C nuclear power station in Somerset.