EDF sees earning tumble as it struggles to cope with prices

VDR visit 10.03.09b

EDF Energy chief executive Vincent de Rivaz with Gwen Parry-Jones, station director at the Heysham 1 nuclear reactor. — VDR visit 10.03.09b EDF Energy chief executive Vincent de Rivaz with Gwen Parry-Jones, station director at the Heysham 1 nuclear reactor.

Gas and electricity giant EDF has seen annual UK earnings slump by 29 per cent after suffering intense competition from rival suppliers and lower wholesale energy prices.

The Big Six provider, which is increasing electricity prices by 8.4 per cent next month, said underlying operating profits fell to £470m last year, down from £664m the previous year.

It lost 80,000 customer accounts over the year, but said its overall customer base was “broadly stable in an intensely competitive” market, at 5.2m.

The French-owned energy group also revealed that the slump in the pound since the Brexit vote cost it £300m when UK earnings were translated into euros.

But EDF, which is building the Hinkley Point C power station in Somerset, said UK nuclear production reached its highest level since 2003 last year in an “exceptional” performance.

EDF, which is 85 per cent owned by the French government, already produces electricity from eight nuclear power stations, though the Hinkley project will be Britain’s first new station in two decades.

It said the rise in nuclear energy generation in the UK came amid an ongoing investment programme that saw it pump £529m into its existing stations last year.

But the surge in production failed to offset a slump in nuclear prices, while EDF was also knocked by lower energy prices across the board in wholesale markets.

Wholesale prices have since risen, in particular for UK suppliers due to the impact of the pound’s plunge since the Brexit vote, and providers are hiking tariffs as a result.

EDF is increasing its electricity prices in March, although it cut gas tariffs by 5.2 per cent in January.

A raft of other suppliers have also recently announced price increases, including ScottishPower and NPower.

Vincent de Rivaz, chief executive of EDF Energy, said the Hinkley project was making “good progress”, with more than 1,200 people now working on the site each day.

He said: “The exceptional performance of EDF Energy’s existing nuclear power stations is making a huge contribution to security of supply and providing large volumes of reliable, low carbon electricity.”

EDF employs around 13,000 people across the UK.