Operating profit before depreciation and amortisation (EBITDA) was down nearly 15 per cent, or 8.9 per cent in organic terms, on the year at €1.1 billion (£924 million).
In its results for first-half 2016, the company said this was due to a “difficult market environment”, but was supported by “good operational performance of its nuclear fleet”. Nuclear output in the UK was up 1.8 per cent on the previous year to 30.9TWh.
EDF said the euro’s rise against the pound sterling had an “unfavourable impact” of €77 million compared with H1 2015. However, the organic decline in EBITDA resulted largely from an organic decline in sales of 11.4 per cent.
The firm put this down to lower volumes of electricity sales to final customers, due to falling customer numbers in a competitive market environment.
An EDF Energy spokesperson told Utility Week the company had 5.27 million product accounts as at 3 July 2016, a reduction of 30,000 since the beginning of the year. “Campaigns, such as the Show me your Bill advertising campaign, as well as a first collective switch have been effective in engaging customers to switch,” they said.
EDF Energy said lower gas tariffs were also to blame forits profit drop, as the company reduced its gas tariffs by 5 per cent on 24 March 2016 to reflect a drop in wholesale gas prices.
EBITDA for the group as a whole was €8.9 billion, a 2.2 per cent fall in real terms compared with the previous year, corresponding to an organic decline of 0.7 per cent.
EDF said its remained “nearly stable” amid challenging market conditions thanks to the “good performance of its regulated activities and renewable energy activities”.
“Operational expenditures were down 1.6 per cent in organic terms compared to the first half of 2015,” it said.
“This change is in line with the action plan presented to the board of directors on 22 April, which provides for a reduction in operating expenses of at least €1 billion in 2019 compared to 2015.”
EDF group chairman and chief executive Jean-Bernard Lévy said: “In a context of increased competition and in an environment marked in recent months by a significant drop in electricity prices on the wholesale market, the group posted good operational results and is able to confirm its financial objectives for 2016.”
Yesterday, the EDFboard gave the go-ahead to the companys Hinkley Point C new nuclear project. EDF’s ability to finance the project through construction has been called into question. At the end of 2015 the company had net debts of £37.4 billion and, at £18 billion, the cost of building Hinkley is almost equal to the value of the entire company (£19.2 billion).
Earlier this week EDF shareholders approved plans to sell off €4 billion of new shares in order to help finance Hinkley. The French government said it would buy shares worth €3 billion.