EDF swings to profit with energy firm powered by price increases
French nuclear power giant EDF swung to profit in the first half of the year, rebounding from a record loss in 2022 thanks to higher electricity prices and nuclear reactor output.
Net income was €5.8bn ($6.44bn), compared with a loss of €5.3bn a year earlier, while net debt rose slightly to €64.8bn from €64.5bn.
The utility recently confirmed a target between 300 and 330 terawatt hours (TWh) of nuclear output for 2023, up from 279 TWh in 2022.
“The recovery of the group’s industrial performance is bearing fruit: not only has EDF managed to secure our low-carbon electricity supply this winter, but these efforts are reflected positively in its accounts,” said France’s energy transition minister Agnes Pannier-Runcher.
Earnings before interest, tax, depreciation and amortisation (EBITDA) reached €16.1bn, up from €2.7bn a year earlier.
An EDF press release said the company is now aiming to reduce the ratio of net debt to EBITDA to 2.5, down from a previous target of 3.0.
The improved results are explained by a “good operational performance in a favorable price environment after a particularly difficult 2022”, EDF chief executive Luc Remont said on a conference call.
“This level of EBITDA allows us to be able to address the group’s strong investment needs for the years to come,” he added, referring to maintenance of its nuclear fleet and the construction of new reactors.
He also defended the use of long-term electricity supply contracts, stating that EDF will be able to provide offers to industrial consumers in September, giving them “visibility on volumes and prices”.
The French state became sole shareholder of the public utility after taking full control at the beginning of June.
A government decision in 2022 to limit electricity price increases and the company’s reduced power output as a result of stress corrosion at several EDF reactors led to a record net loss of €18bn in 2022.
However, French nuclear production has improved in recent months, rising to 158 terawatt hours (TWh) at the end of June, up 2.6 per cent year on year.
EDF said that 11 of the 16 reactors that were most sensitive to stress corrosion have been repaired. Two more are undergoing repairs and another two will be fixed by the end of 2023, with the remaining one to be handled during its next ten-year inspection.
The group’s cash flow stood at minus €1.6bn at the end of the first half of the year, compared with negative four billion euros a year earlier.
Reuters – Forrest Crellin and Benjamin Mallet