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EDF posts record net loss after nuclear fleet hit by repairs

French energy company EDF has reported a significant downturn in its 2022 results after repairs choked its nuclear power output and government measures tightened, but it saw UK profits soar due to high electricity prices.

Annabel Cossins-Smith 17 Feb 23,  https://www.power-technology.com/news/edf-posts-record-losses-after-nuclear-troubles/

rench energy giant EDF on Friday posted a record loss for 2022 after necessary repairs to its nuclear power reactors saw a serious decline in electricity output.

A company spokesperson said in a press release that in November last year just 30 of 56 reactors were operational but that this number has now risen to 43. It cited stress corrosion on 16 of its reactors as a key reason for its output decline, stating that 10 of these have been or are currently being treated.

The state-controlled gas and electricity supplier saw a net loss, excluding non-recurring items, of $13.5bn (€12.7bn) last year, a significant decline from its profits of $5bn (€4.7bn) in 2021. Its raw earnings (EBITDA) stood at -$5.3bn (-€5bn), compared with a positive EBITDA of $19bn (€18bn) in 2021.

“The target for 2023 is to improve operational performance,” EDF CEO Luc Rémont said on a call, Bloomberg reports. “The aim is to achieve an EBITDA that will be significantly higher than in 2021.”

The company also posted a net financial debt of $68.6bn (€64.5bn), up 50% from 2021. An EDF statement cited issues with cash flow from operations, hybrid bonds and a $3.7bn (€3.5bn) capital increase as reasons behind this.

However, EDF’s UK profits soared, largely due to electricity price rises in the country. This took its underlying profits to $1.4bn (£1.2bn), up from a loss of $25m (£21m) in 2021.

The company has said that its losses in France in particular come in part due to government price caps. The French government set these to protect consumers from soaring energy prices, shortly before taking majority control of the company last year.

“The French government’s exceptional regulatory measures to limit the increase in sales prices to consumers in 2022 had an adverse estimated effect of -€8.2 billion (-$8.7bn) in EBITDA”, a company press release stated. It added that “before these measures, EBITDA benefited from market price rises passed on to customers for an estimated amount of €8.7 billion ($9.2bn)”.

EDF began legal proceedings against the French government in August last year, claiming $8.8bn (€8.3bn) in damages after the company was forced to sell more of its power to rivals at prices below market rates as a way to counter its monopoly position in France.

The government is also continuing efforts to nationalise the company. Power stations operated by EDF provide almost 70% of France’s electricity, mainly through its nuclear fleet.

February 18, 2023 - Posted by Christina Macpherson | business and costs, France