EDF Earnings Get Trading Boost, Offsetting U.K. Challenges

(Bloomberg) -- Electricite de France SA said its first-half earnings were little changed from a year earlier on a like-for-like basis as favorable market conditions in France and a “very strong performance” at its trading unit offset the impact of a price cap in the U.K. and prolonged outages at some of its British nuclear plants.

• Earnings before interest, taxes, depreciation and amortization rose 0.1% on an organic basis to 8.35 billion euros ($9.31 billion), while net income excluding one-time items declined 19% to 1.40 billion euros amid rising financial expenses, depreciation and amortization.

Key Insights

• The sluggish earnings growth underscores challenges faced by Chief Executive Officer Jean-Bernard Levy as the former electricity monopoly is facing headwinds in the U.K. and losing customers in France to powerful rivals such as Total SA
• Investors will seek details on the progress of Levy’s plan, slated by year-end, to overhaul the financial structure of the state-controlled nuclear behemoth, which is unable to cover its huge investment needs with cash flows.
• Shareholders will also be interested to hear whether EDF is making progress on getting more favorable regulation for its French nuclear output, which it partly sells to rivals below current wholesale prices.

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• The company reiterated its 2019 targets for Ebitda, cost cuts and cash flow, and its 2020 ambitions for asset sales, debt leverage and its payout ratio.
• The CEO and Chief Financial Officer Xavier Girre will address analysts and investors on a conference call at 8:30 a.m. in Paris.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Lars Paulsson

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