French energy giant EDF reported a drop in sales for Q1 and a drop in revenue in Britain and France, as increasing competition and falling wholesale costs hit performance.
The company’s sales fell by almost 7% in the first quarter of 2016 as wholesale power prices hit record lows and relatively mild weather over the winter reduced demand. In the UK specifically, sales were down by even more, falling by just under 10% in the first three months of the year.
Revenue also fell in the UK, by 13.2% to settle at €2.93 billion for the quarter, while in France revenue dropped to €12.1 billion from €12.7 billion.
Reuters report EDF’s chief financial officer Xavier Girre as saying: “UK sales were penalised by mild weather and stiff competition, especially in the B2C segment.”
EDF’s projected nuclear output for this year was reduced to around 410 terawatt hours (down from 413), following on going repair works on one of the company’s nuclear plants in France, Paluel 2, where a steam generator collapsed during maintenance work.
They have, however, said that their earnings forecast the year has remained more or less unchanged and they are on track to hit targets.
EDF are already in a somewhat precarious position as the Hinkley Point nuclear project continues to make headlines for all the wrong reasons.
Financing the €18 billion project is looking ever more difficult for the company, whose debts currently outweigh its market value.
EDF is set to embark on a large capital raising scheme, including plans to sell off some €10 billion in assets over the next four to five years. This includes plans to sell the stake they own in RTE, the French equivalent of National Grid.
The energy company is currently looking for ways to fund the remaining 66.5% stake in the Hinkley Project, following Chinese investment for the first 33.5%.
The company is 85% controlled by the French government, who have repeatedly maintained that they are still fully behind the Hinkley Project and have mentioned the guaranteed price per megawatt hour offered by the UK government as signs of assured profitability when (or if) the plant gets built and becomes operational.
