Energy Giant EDF Posts Worst-Ever Results

Energy prices reached levels that had never been seen before, but France’s state-owned power company EDF lost a record €17.9 billion (£16 billion) that year. Limiting how much energy French people could use and having to close many of its nuclear power plants for repairs hurt EDF’s profits. The losses are the third largest in the history of French business and the worst in more than 20 years.EDF owes €64.5bn, which is a lot of money.

At the most basic level, EDF’s losses were worth €4.99bn. But the number was very different from EDF’s business in the UK, where it supplied electricity and gas to five million homes and made a profit of £1.12 billion ($1.26 billion). As a response to Russia’s invasion of Ukraine, the French government of President Emmanuel Macron set up a “tariff shield” for consumers. This means that energy companies can only raise prices by 4% in 2022 and 15% in 2023, keeping inflation low.

France’s business world hadn’t done so poorly since 2002 when Vivendi Universal and France Telecom both lost more than €20 billion the year before.

CEO of EDF, Luc Remont, said that our results were hurt by a drop in the amount of electricity we produced and by special regulatory measures in France in response to a tough market in 2022. He also said that getting the company back on track was now the most important thing. He did say, though, that core earnings would be much higher in 2023.

More than half of EDF’s 56 old nuclear power plants went offline for repairs due to the Covid-19 pandemic. This cut EDF’s nuclear output in France by 30%, to its lowest level since 1988. France is the only European country with more nuclear power plants than other countries. EDF has a lot of money problems, but one big reason is that it has to sell a quarter of what it makes at a set price to its competitors.

It meant that the French electricity market could be opened up to competition, but EDF says that it has put the company in the ridiculous position of having to pay for its competitors.

One former CEO said that things got “weird” in 2022. Due to the rising price of electricity on the European market, technical problems with EDF’s power plants, and the government’s decision to extend the low price guarantee to customers, EDF had to buy electricity at €100 per unit and sell it to competitors for €46. EDF says that many of these competitors are trading on the market and are not real players.

Three former CEOs have said that the system is “a poison pill” and that the EU and Germany set it up to hurt France. Even though the French government owns 84% of EDF, it has started a process to get full control of the company. Because of this, Arenh will likely go through many big changes.

President Macron has talked about the nuclear industry coming back to life. He wants to build six new reactors to help France reach the EU’s goal of being carbon-neutral by 2050.
Source: https://miamiwire.com/energy-giant-edf-posts-worst-ever-results/