War in Ukraine, shutdown reactors, tariff shield, historic drought: the headwinds are building up for EDF in 2022. While the State has launched the process of nationalizing the energy company, the latter announced on Thursday 28 July, having suffered one of the heaviest losses in its history in the first half, at 5.3 billion euros. “Has there ever been a semester in EDF’s history where the figures were so negative? I very much doubt it”recognized its CEO, Jean-Bernard Lévy. “The results for the first half reflect the difficulties encountered in terms of nuclear production in France and, to a lesser extent, hydroelectricity, as well as the effect of the tariff shield put in place in France for 2022”, he added.
In this context of price limitation, intended to preserve household bills, EDF sold more cheap electricity to its competitors, the alternative suppliers, as required by the regulations. A measure likely to be renewed for 2023 and whose negative impact on the gross operating surplus (ebitda) in 2022 reaches some 10 billion euros. And this, even if the deputies voted on July 23 in favor of an increase in these tariffs imposed from 42 to 49.50 euros from 1is January 2023. “These events force the group to buy electricity in a context of high market prices”summarized the energy company, 84% owned by the state.
Under these conditions, the group’s net financial debt amounted to 42.8 billion euros at the end of June, compared to 43 billion at the end of 2021, despite the capital increase of 3.1 billion euros at the end of march. Turnover, on the other hand, rose sharply (+67.2%), to 66.262 billion euros, supported by the sharp rise in electricity and gas prices in Europe.
“Security issues”
An announcement nevertheless came to shed light on this gloomy picture, EDF having received the green light on Wednesday from the Nuclear Safety Authority (ASN) as part of its control program linked to corrosion problems. A decision which confirms the group in its desire to produce in 2022 between 280 and 300 terawatt-hours (TWh), then between 300 and 330 TWh in 2023, indicated Jean-Bernard Lévy. On this subject, EDF plans to check all of its reactors by 2025 by ultrasound to look for any traces of this problem which has led to the shutdown of 12 reactors out of 56.
The group must control the most sensitive areas of the 1,450 megawatt (MW) and some 1,300 MW reactors as a priority. “EDF’s strategy is appropriate given the knowledge acquired on the phenomenon and the associated safety issues”agreed the ASN in its press release of July 27, without claiming a tighter control schedule overall.
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