French energy giant EDF hit by warm weather

 
Adam Hignett
INVESTORS reacted with disappointment yesterday as mild weather on the continent and unplanned outages in the UK were blamed for underwhelming results at French energy giant EDF.

The company saw sales fall in the UK to €9.8bn (£7.25bn), a decline of two per cent on the year with earnings before interest, tax, depreciation and amortisation (Ebitda) down 8.5 per cent to €2bn.

The company said the poor UK results were due to unplanned August outages of two reactors which ended up spending months offline.

2014 also saw EDF win approval from the European Commission to proceed with its investment in new nuclear reactors at Hinkley Point C. However, it warned it is still expecting challenges regarding the final agreements and of the financing package for the project.

The plans at Hinkley Point have caused controversy since their inception with financing of the project by investors being guaranteed a return by future government subsidies – the legality of which brought the issue to the attention of the Commission.

Austria is looking to challenge the ruling which could lead to an appeal process taking up to four years.

France was the only region to deliver an increase in profits to EDF, whose mascot Zingy the flame is a hit online.

Overall group revenues rose 1.3 per cent on the previous year to €72.9bn with group Ebitda up 7.3 per cent to €17.3bn. Operating profits for the year fell to €8bn from €8.3bn the previous year.

Jean-Bernard Levy, chief executive of EDF, said, “2014 was a good year for EDF, which achieved solid operating and financial results, with, in particular, an excellent showing by low-carbon energies.

Shares in the company closed down 3.84 per cent on the results to €23.41 in Paris yesterday.

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