EDF announces figures for 2018

20 February 2019

EDF (83.66% owned by the French government), on 15 February announced an increase in its gross operating surplus of 11% in 2018, driven in particular by the increase in nuclear and hydraulic power generation. EBITDA amounted to €15.3 billion ($18.0 billion) in 2018, up 11.1% on a reported basis and 11.3% organically over 2017, a company statement said. This figure is in line with the group's target of €14.8 billion and €15.3 billion in 2018. Net income fell by 62.9% compared with 2017, to €1.18 billion. Turnover increased by 6.3% in published data to €68.98 billion. According to a Factset consensus, analysts had expected on average a net current income of €1.89 billion, a net profit of €2.12 billion, a gross operating surplus of €12.2 billion and a turnover of €70.23 billion.

In 2019, EDF expects Ebitda of between €15.3-16 billion. The reduction in operating expenses should reach an accumulated amount of €1.1 billion in 2019 compared with 2015. The group's projections are based on a nuclear power generation assumption of 359 TWh this year. Over the 2019-2020 period, the group expects total net investments of around €15 billion a year and disposals of €2-3 billion.

CEO Jean-Bernard Levy noted that EDF had stabilised its net financial debt (€33.4 billion at the end of 2018), strengthened its balance sheet, overhauled the French nuclear sector and strengthened its supply business. He described the commissioning of the world's first EPR, at Taishan NPP in China as a "major achievement" for the "revitalised" French nuclear industry.

French nuclear output for the year was 393.2 TWh, which was 14.1 TWh higher than in 2017. EDF said this was because 2017 output had been "heavily penalised" by several reactor outages linked in particular to the manufacturing records of the Creusot plant and the "carbon segregation" issue, as well as the temporary shutdown of the four units of the Tricastin NPP. A decrease in UK's nuclear output to 59.1 TWh - down 4.8 TWh from 2017 – was attributed to issues found during an inspection at Hunterston B and the extension of an outage at Dungeness B. Reactors 3 and 4 at Hunterston in Scotland were taken offline in March and October after cracks were found during routine inspections. EDF Energy in December said unit 4 was expected to return to service at the end of March and unit 3 at the end of April.

Levy said 2018 had seen a complete "restructuring" of the French nuclear industry, with the integration of Framatome into EDF, adding that Framatome contributed €202 million to the EDF Group's Ebitda for 2018. The French government in November 2018 announced a ten-year energy transition strategy (PPE) to reduce fossil fuel consumption, diversify France’s energy mix and reduce the share of nuclear energy from its current 75% to 50% by 2035. Levy said the EDF Group intended to be a leader in the energy transition focusing on three structural measures - strengthening the regulatory framework, optimising the group's organisation, and preparing the case for nuclear new build in France.

The government had directed EDF to draw up a plan for the construction of new EPRs, he noted, and the company was working to prepare a comprehensive case for nuclear new build, addressing dimensions such as competitiveness, legal and regulatory framework and pre-financing. The company aims to provide the government with a detailed plan by the summer of 2021, to enable a final investment decision to be made.

Levy told a conference call: “We are very pleased because we said we would do it and we indeed have delivered the rebound that we have promised. This is reflected in the numbers and the figures that we are publishing today. And I have to say, we are very happy with our performance.”

He added: “EDF is at the helm of the nuclear industry in France, and this will open doors for us into international markets - 2018 will, of course, be also noted for the French government’s announcements regarding the country’s multi-annual energy programme, the PPE, which will span the next 10 years. This road map sets a major priority. Reducing our country’s carbon emissions is the priority, while, of course, we have to maintain our security of supply. The PPE highlights low carbon electricity and, more specifically, nuclear and renewable power. They are the key drivers behind our ambitions. And for EDF, these guiding principles are essentials, as they confirm our convictions, they form our strategy.”

The previous day, the French President’s Elysee department said the government planned to renew Levy’s mandate as EDF chairman and CEO and would propose this to the board and the upcoming annual shareholders’ meeting in May. Levy was appointed in 2014 and has spearheaded plans for EDF to invest heavily in solar energy, electricity storage and electric mobility while also arguing strongly for the government to allow EDF to extend the lifespan of its nuclear reactors. 

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