EDF has attributed a sharp decline in UK profits during the first half of 2019 to a “deterioration of conditions” in the market.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the group’s UK operations was down by 75.9 per cent in organic terms to €128 million (£115.5 million) in H1 2019, compared to €485 million (£437.9 million) for the first half of 2018.
The company said the results for the first half of the year ending 30 June were negatively impacted by conditions in the UK, including the introduction of the cap on standard variable tariffs, suspension of capacity revenues and a downturn in nuclear generation.
Nuclear output in the UK amounted to 24.5TWh, down 5.7TWh compared with first-half 2018. This contraction resulted from the extension of the Hunterston B and Dungeness B outages.
EDF’s UK sales saw a slight decline in the first half of the year, down 2.2 per cent in organic terms. For H1 2019 sales were €4.5 billion (£4.0 billion), compared to €4.6 billion (£4.1 billion) for H1 2018.
The group said its customer portfolio had shrunk “slightly” (-1.1 per cent compared to 31 December 2018) against “intense competitive pressure”.
The group’s total EBITDA remained relatively stable, reaching €8.3 billion (£7.4 billion) in first-half 2019, compared to €8.0 billion (£7.2 billion) for the same period in 2018.
Net income, excluding non-recurring items, totalled €1.4 billion (£1.2 billion) for first-half 2019, down €337 million (£304 million) compared to first-half 2018.
The group’s net financial debt stood at €37.4 billion (£33.7 billion) at the end of June 2019, down €506 million (£456 million) compared with the end of December 2018.
Looking ahead, the company’s target range for 2019 EBITDA is €16.0-€16.7 billion (£14.4-£15.0 billion).
Jean-Bernard Lévy, EDF’s chairman and CEO said: “The first half-year results in 2019 are in line with our forecasts. Bolstered by a strengthened balance sheet, the group is continuing its deployment of the CAP 2030 strategy and confirms its annual targets.
“The professionalism of our teams has made possible to achieve major milestones in the Grand Carenage, HPC and Taishan projects, and to bring about some major successes in the solar and off-shore wind power sectors.
“At the same time, the group is constantly innovating for energy transition, paving the way for new offers that are totally in step with our clients’ lifestyles.”
Alongside EDF’s half-year financial results, the company also revealed its project to build a new nuclear reactor in Flamanville will be delayed for at least three years due to an issue with weldings in the reactor’s containment building.
Flamanville is being built using European Pressurised Reactor technology, which is also being used for the Hinkley Point C project.
The Hinkley project hit a major milestone in June with the completion of the base for the first reactor.