UPDATE: EDF 08 Net Profit -39.5% On French Regulated Tariffs
February 12 2009 - 3:37AM
Dow Jones News
French state-controlled utility Electricite de France SA
(1024251.FR) Thursday said full-year net profit fell 39.5%, due to
provisions to cover compensatory payments to competitors under the
extension of the TarTAM regulated tariff for industrial power
clients in France.
Europe's biggest utility by market value said full-year net
profit group share fell to EUR3.4 billion from EUR5.62 billion a
year earlier.
Meanwhile, net income from ordinary operations fell 7.9% to
EUR4.31 billion from EUR4.68 billion a year earlier, due to the
application of the international accounting standard IAS 39 on
commodity purchase contracts. That falls short of a EUR4.43 billion
average estimate from a Dow Jones Newswires poll of six analysts'
forecasts.
Earnings before interest, taxes, depreciation and amortization,
or Ebitda, increased 1.5% to EUR15.44 billion, from EUR15.21
billion a year earlier, before the EUR783 million provision after
tax, or EUR1.195 billion before tax, relating to the extension of
the TarTAM regulated tariff for industrial power clients.
That beats a EUR14.58 billion average estimate for Ebitda
according to a Dow Jones Newswires survey of six analysts.
EDF's Chief Executive Pierre Gadonneix said the company in 2009
will give priority to organic growth and announced a new asset sale
program of EUR5 billion for 2009-2010.
"In 2009, we will be giving priority to organic growth through
investment, particularly in France, the improvement of our
operating performance, the integration of recently-acquired
companies and the reinforcement of our financial structure," he
said.
"We look ahead into 2009 with confidence and will steer the
course of investment revival in relation to long-term environmental
and energy challenges," Gadonneix said.
The company also said that Ebitda in 2009 should grow thanks to
the consolidation of U.K.-based nuclear company British Energy PLC
it acquired in the summer 2008. But it warned that net profit from
ordinary operations this year shouldn't increase as it plans to
continue its "substantial" investments in its generation and
network activities.
In 2008, EDF launched multibillion-euro takeovers of U.K.
nuclear utility British Energy and half of U.S. joint-venture
partner Constellation Energy Group Inc.'s (CEG) nuclear assets. It
also presented investment plans, including measures designed to
improve the performance of its fleet of nuclear power stations.
In France, sales were up 6.3% at EUR34.3 billion, with 3.8
points of sales growth stemming from change in prices and tariffs,
1 point from the development of natural gas sales and services, and
only 1.5 points from volume growth.
Ebitda in France in 2008 stood at EUR9 billion, including an
adverse impact linked to the provision to cover future compensatory
payments to competitors under the extension of the TaRTAM.
Excluding the provision for TaRTAM, organic Ebitda growth stood at
2.2% in France, EDF said.
Internationally, organic sales were up 15.6% at EUR30 billion
while Ebitda totaled EUR5.2 billion, representing an organic growth
of 6.5%, bolstered by price and tariff increases in the U.K., good
results of electricity activities in Germany and "excellent"
performance by EDF Trading, EDF noted.
Shares of EDF have shed nearly half their value over the past 12
months as power prices and the relative competitiveness of nuclear
power have declined along with the oil price and as the company has
stretched its balance sheet with an acquisition spree. The shares
closed in Paris Wednesday at EUR35.55.
EDF's board of directors will recommend the payment of the
dividend of EUR1.28 per share for 2008.
Company Web site: http://www.edf.com
-By Geraldine Amiel and Adam Mitchell, Dow Jones Newswires, +33
1 40171740; geraldine.amiel@dowjones.com,
adam.mitchell@dowjones.com
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