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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