EDF pledges to increase cash flow to fund Hinkley Point nuclear reactor
French state-owned utility firm EDF today said a drop in nuclear production hit its core earnings for 2016.
However, it said it will deliver positive cash flow next year before it has to invest in building new reactors in Britain.
The figures
The energy giant's core earnings fell 6.7 per cent to €16.41bn (£13.98bn), while sales dropped 5.1 per cent to €71.2bn.
Net income for the year increased 140.2 per cent to €2.85bn.
Nuclear output fell nearly eight per cent to 384 terawatthours (TWh), and the company set a 2017 target for nuclear output of 390 to 400 TWh.
Shares were down about 0.5 per cent following the results.
Why it's interesting
EDF's nuclear output was impacted by the temporary closure of about a third of its French reactors last year for safety checks following the discovery of manufacturing problems at its suppliers.
The French firm has been taking on debt just to pay dividends for several years, according to Reuters. It had negative cash flow of €1.6bn last year, and €2.1bn in 2015, and its due to spend £18bn building two nuclear reactors in Hinkley Point as well as a €50bn upgrade of its French nuclear stations over the next decade.
EDF's board approved a €4bn increase in planned capital raising yesterday, and the French state is set to subscribe for €3bn, Reuters said.
What EDF said
Jean-Bernard Levy, EDF’s chairman and chief executive said cost savings, asset sales, lower investments and a state-funded capital injection will boost EDF's finances by next year.
He added: "The 2016 financial results show that EDF’s fundamentals are robust. The group's transformation is well under way, thanks to the commitment and remarkable effort of its employees."
"We will continue this momentum in 2017 by launching new offers and innovative services for our customers, by developing low carbon projects and by exporting our expertise into targeted markets outside of Europe."