French state-controlled energy firm EDF has sharply downgraded its financial forecast this year, estimating a €26bn impact on the group’s core profits.
This follows both sustained lower nuclear power output and government interventions earlier this year to curb the price of electricity bills.
French President Emmanuel Macron forced the firm to sell electricity below market prices – capping energy bill rises tofour percent this year.
It is also suffering outages at several reactors in France amid pipeline defects – which has dragged its output to multiyear lows at a time when a surge in energy prices has been exacerbated by Russia’s invasion of Ukraine.
Macron revealed earlier this year that France would look to extend the life of as many of the country’s ageing 56 reactors as possible beyond 50 years.
This is a plan that would require maintenance programmes at a cost running into billions of euros.
Yesterday, EDF revealed earnings before interest, taxes, depreciation and amortisation (EBITDA) would take hits of €16bn from the production falls and €10.2bn from the regulatory measures, up from previous estimates of €11bn and €8.4bn.
This compares markedly with a core profit last year of €18bn.
Last month, French government announced it would pump €2.1bn of public funds into the struggling energy giant – buying up the majority of a €2.5bn share sale.
The latest hits come at a crucial juncture for EDF as looks to roll out new reactors which are central to France’s plans to strengthen its focus on nuclear power.
Macron has confirmed plans to build at least six new European pressurised reactors in the coming years at an estimated cost of €52bn.
EDF confirmed it was maintaining a goal to have a net debt of about three times EBITDA by the end of 2023, but it also warned that it could struggle to reach financial targets.