EDF is expecting a hit of around €32 billion to its full-year core earnings from lower nuclear production, which is a bigger loss than previously estimated and its sixth profit warning this year.
EDF has been struggling all year with an unprecedented number of outages at its 56-strong fleet of reactors, partly due to corrosion issues detected in December 2021. Those problems have been compounded by strikes over wages in the past few weeks that further delayed repair works at some reactors.
The group, which is in the process of being fully nationalised, confirmed nuclear output would come in at the lower end of a previously announced 280-300 terawatt-hours range – a 30-year low. In September, EDF had forecast a hit to its earnings of €29 billion due to lower production.
EDF is also about to get a new CEO. The French parliament this week approved President Emmanuel Macron’s proposal to appoint Luc Remont, currently a top executive at Schneider Electric, to take over the helm of the company. Finance Minister Bruno Le Maire said he wanted Remont to start in his new role in mid-November. Separately, the French government on Thursday announced it will next year require the utility EDF to sell less of its nuclear power at prices set by the regulator to smaller rivals than it did in 2022.
EDF will be required to sell 100 terrawatt-hours (TWH) to rivals at what is known as the Arenh price – a tariff well under market level and even EDF‘s production costs which had been weighing on its profits – compared with 120 TWH this year. The state, which already owns 84% of EDF, is due to launch a buyout offer for the shares it does not already own by the end of this year, in a deal worth almost €10 billion.
EDF‘s board late on Thursday gave its nod to the offer and advised minority shareholders to take the deal. Citing an independent expert overseeing the takeover proceedings, the company said the price of €12 a share was fair. This would even remain the case in the event that a lawsuit brought by EDF against the state for having forced it to sell more cheap power to rivals than initially planned this year, results in financial compensation.
