EDF Rises Most Since 2008 After Government Grants Tariff Rise
Electricite de France SA surged the most in almost five years in Paris trading after the government allowed an increase in regulated prices for households.
The shares jumped as much as 10 percent to 19.56 euros, the most intraday since Oct. 29, 2008, and traded 9 percent higher at 10:32 a.m. in Paris. It was the best performer on the Stoxx Europe 600 Index.
Energy Minister Philippe Martin authorized EDF to increase the regulated domestic tariff by 5 percent as of Aug. 1, and by a further 5 percent in August 2014, he said in a press release. The electricity regulator had recommended an increase of 6.8 percent to 9.6 percent this year to cover a shortfall in costs.
“The government decided to spread the increase in tariffs necessary to cover EDF’s costs over more than one year in order to protect households’ buying power as much as possible,” Martin said in the press release.
EDF was raised to neutral from sell at UBS AG, which said the tariff increase and a “very likely” nuclear-reactor life extension would enable the company to keep debt under control.
EDF may continue to pay a 6.5 percent dividend yield, UBS analyst Patrick Hummel said in a note today, raising his 2013-2016 Ebitda estimate by 2 to 9 percent.
To contact the reporter on this story: Ladka Bauerova in Prague at email@example.com