EDF sees 2018 rebound but nuclear output lower again in 2019

[PARIS] EDF's 2017 core earnings fell 16.3 per cent 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-than-expected maintenance outages at several of its 58 nuclear reactors in France, while the nuclear regulator ordered its four reactors in Tricastin, southern France, shut down for months for safety reasons.

The outages led to a 21 per cent drop in French electricity generation income to 4.8 billion euros (S$7.86 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 an 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.

Mr Levy's comments helped lift EDF shares more than 5 per cent in early trading before easing back slightly.

However, Mr 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 per cent to 37 TWh.

Heightened competition from companies like Direct Energie, Engie and new market entrant Total further eroded EDF's market share to 85.5 per cent 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 per cent to 69.6 billion euros, core Ebitda earnings fell 16.3 per cent to 13.7 billion euros, while net profit rose 11.3 per cent to 3.17 billion euros 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 per cent to 1.03 billion euros due to lower nuclear power sales prices.

Only EDF's Italian unit Edison saw earnings rise strongly, up 42 per cent to 910 million due to higher power prices and a better performance of its gas-fired generation fleet.

REUTERS