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Drop in EDF share price as Hinkley nuclear saga drags on

FT 13th Nov 2017, Shares in French energy company EDF dropped more than 10 per cent on Monday
after it cut its profit and cash flow targets because of falling demand and
delays in restarting some of its nuclear reactors. The state-backed company
said earnings before interest, tax, depreciation and amortisation for 2018
were now expected to be between €14.6bn and €15.3bn, compared with its
earlier assumption of at least €15.2bn. It also said it was less confident

about achieving positive cash flow, saying it will be “slightly
positive or close to balance”. It had previously said it would return to
positive cash flow, after dividend payments, in 2018.

EDF, which is in charge of the controversial new nuclear power development at Hinkley Point
in the UK, blamed lower electricity consumption in France, lower
availability of some of its nuclear reactors in France and the risk that it
might sell less energy in the UK and at a lower price. “Basically, this
is the market taking into account the series of bad news that has been
coming,” said one sector specialist.

“It’s Hinkley Point, it’s the
number of plants that have had to be stopped due to the regulator and
fundamentally a Nicolas Hulot climate that is not very positive.” Mr
Hulot is a climate campaigner and strident critic of nuclear power who is
now France’s energy minister. Morgan Stanley suggested that additional
risks included “possible delays in the delivery of nuclear plants”,
while Mr Jeffery said there is “a strong risk the issue caused by the
nuclear regulator’s ongoing investigation into EDF’s existing nuclear
plants could roll on beyond early 2018 as anticipated by EDF”.

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November 15, 2017 - Posted by | general

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