EDF Slides on Profit Outlook, Cut in Output Target: Paris Mover

Electricite de France SA, the world’s biggest operator of nuclear reactors, sank to the lowest level in more than five months in Paris after saying earnings aren’t expected to grow next year as it previously anticipated.

The company fell as much as 2.8 percent to 14.80 euros, the lowest intraday price since June. EDF said yesterday after the market close it was cutting an annual target for French atomic- energy output for 2012 and profit may be little changed in 2013.

EDF management “is more cautious on 2013,” Philippe Ourpatian, an analyst at Natixis (KN), wrote today in a report, cutting his price estimate to 16.50 euros from 18 euros.

The company also lacks clarity on the outcome of talks with the government over tariff rates, taxes on renewable energies and the future of nuclear power, according to Natixis.

The shares, down 21 percent this year, declined by 2.7 percent to 14.82 euros by 11:40 a.m. in Paris trading.

EDF’s nuclear output in France will be about 410 terawatt- hours in 2012, down from a 415 terawatt-hour forecast. Output fell 6.2 percent to 295 terawatt-hours in the first nine months.

The company added to maintenance halts and inspections at plants after regulators at Autorite de Surete Nucleaire demanded more stringent checks and upgrades after the Fukushima disaster in Japan last year. EDF’s aging generators were also halted for tougher-than-usual inspections that are required every decade.

It said earnings before interest, tax, depreciation and amortization may be “stable” next year, with growth returning in 2014. That compares with a prior medium-term target of annual average Ebitda growth through 2015 of 4 percent to 6 percent.

EDF’s caution stems from its Edison natural gas business in Italy, weaker trading outlook and pressures on eastern European and Belgian power generation because of lower demand and prices, Sofia Savvantidou, an analyst at Citigroup Inc., said in a note.

The French utility took control of Edison this year and has pledged to renegotiate the unit’s natural gas import contracts, according to Chief Financial Officer Thomas Piquemal.

EDF’s 58 reactors in France generate about three-quarters of the country’s power, a higher than any other nation. It has accumulated a deficit from paying for renewable-energy subsidies in France that will reach 5 billion euros by the end of the year and more in 2013, Piquemal said yesterday. The company is in talks with the state on erasing the shortfall by 2017, he said.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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