EDF projects billions in losses from regulatory action and lower output

Lower output from the company's nuclear power plants, on top of a political decision to sell electricity to consumers at a discount, will have a significant impact on the bottom line.
Photo: Regis Duvignau/REUTERS / X00095
Photo: Regis Duvignau/REUTERS / X00095
BY MARKETWIRE, TRANSLATED BY CHRISTOFFER ØSTERGAARD

French utility Électricité de France, which has the French state as its majority shareholder, projects a significant impact on earnings this year as a result of lower output from the company's nuclear power plants and a political decision that the utility sell its electricity to consumers at a substantial discount.

According to Bloomberg News, the EDF released new projections Monday showing that the impact of the discount on earnings before interest, taxes, depreciations and amortizations will reach EUR 10.2bn in 2022 against EUR 8.4bn previously.

Moreover, the negative effect of lower output will amount to approximately EUR 16bn against previous projections of EUR 11bn.

EDF has previously reported that the company will be under pressure as a consequence of lower output from nuclear power plants undergoing repairs and maintenance, writes Bloomberg News. On top of this, French authorities have decided that the company must sell power at a steep discount to project consumers and companies from surging energy prices.

However, the utility maintains targets in place towards the end of 2023 of net debt relative to EBITDA of approximately 3 times and adjusted net debt relative to EBITDA of 4.5-5 times.

The EDF share price falls 3.4 percent to EUR 8.43 from opening trading.

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