Outages at French reactors lead to loss of revenue
PARIS: EDF’s 2017 core earnings fell 16.3 percent as the French utility struggled with nuclear reactor outages and lost a million customers, but its chief executive said he expected a rebound this year.
Last year, EDF suffered extended unplanned outages as well as longer-thanexpected maintenance outages at several of its 58 nuclear reactors in France, while the nuclear regulator ordered its four reactors in Tricastin, southern France, to be shut down for months for safety reasons.
The outages led to a 21 percent drop in French electricity generation income to €4.8 billion ($6 billion), as nuclear power generation fell to 379 terawatthours (TWh), well below its initial target of 390-400 TWh. When all its reactors are up and running, EDF can produce up to 420 TWh per year.
For this year, EDF forecasts output of at least 395 TWh.
EDF Chief Executive Jean-Bernard Levy said market conditions had been difficult in nearly all the firm’s business lines, but forecast improvement this year.
“2018 will be the year of the rebound,” he said on an earnings call on Friday.
Levy’s comments helped lift EDF shares more than 5 percent in early trading before easing back slightly.
However, Levy warned that nuclear output would be lower again in 2019, when its Fessenheim nuclear plant will be permanently closed and its new reactor in Flamanville will still be ramping up to full production. Next year will also see several large-scale maintenance outages, he added.
French 2017 hydropower output was down 12 percent to 37 TWh.
Heightened competition from companies such as Direct Energie, Engie and new market entrant Total further eroded EDF’s market share to 85.5 percent of consumption and put margins under pressure.
EDF said it will cut its retail costs in response and will launch new price offers, notably for green power.
EDF said its 2017 revenue fell 2.2 percent to €69.6 billion, core EBITDA earnings fell 16.3 percent to €13.7 billion, while net profit rose 11.3 percent to €3.17 billion thanks to capital gains on asset disposals, notably the sale of part of its grid unit RTE.
Core earnings in the United Kingdom fell 33 percent to €1.03 billion due to lower nuclear power sales prices.
Only EDF’s Italian unit Edison saw earnings rise strongly, up 42 percent to 910 million due to higher power prices and a better performance of its gas-fired generation fleet.