EDF Sees Improved Second-Half Profit After Power Sales IncreaseTara Patel
Electricite de France SA, Europe’s biggest generator, reported a 12 percent gain in first-quarter sales after an Italian acquisition and said profit will rise in the second half on cost savings and improved atomic output.
Revenue rose to 23.36 billion euros ($30.76 billion) from 20.84 billion euros a year earlier due to the consolidation of Edison SpA, the Paris-based operator of French and U.K. nuclear reactors said today in a statement. The increase was 4.7 percent on a like-for-like basis.
EDF confirmed 2013 financial and nuclear output targets.
The utility, which is controlled by the government, faces billions of euros of costs to improve safety at its 58 French reactors after the country’s atomic authority tightened rules following the 2011 meltdown at the Fukushima plant in Japan. The regulator told EDF yesterday it could continue to operate a reactor at its oldest plant at Fessenheim as long as safety is improved by the end of the year.
EDF expects growth of earnings before interest, taxes, depreciation and amortization not including Edison in the second half because of cost-cutting measures and improved French nuclear output, according to today’s statement.
Sales in France increased 3.4 percent on a like-for-like basis due to colder weather while nuclear output fell 2.6 percent as more reactors were halted for work. Revenue rose 6.8 percent on a like-for-like basis in the U.K. while it increased 12.5 percent in Italy, EDF said.
“The fact that supply prices of long-term gas contracts are higher than those on the spot market continues to penalize the margins of the gas business” in Italy, EDF said. It obtained lower prices on a supply contract with Algeria’s Sonatrach on April 24. The new terms will add nearly 300 million euros to Edison’s Ebitda this year, it said.
EDF in February lowered its outlook for annual spending in order to improve finances. The utility’s reactors supply three-quarters of France’s power output, making it the world’s most nuclear-dependent country.
EDF has forecast Ebitda may hold steady or climb as much as 3 percent this year, excluding the Edison unit.
The company expects French atomic output of 410 terawatt-hours to 415 terawatt-hours this year, and a busier schedule for in-depth reactor inspections. Output fell to 405 terawatt-hours last year from 421 terawatt-hours in 2011.