Shares in French state-controlled utility Electricite de France SA (1024251.FR) fell more than 8% Thursday after the company announced a 39.5% drop in full-year net profit, due to payments to competitors related to regulated tariffs, and reported a lower dividend than expected.

Europe's biggest utility by market value also announced a new asset sale program, to reduce debt by at least EUR5 billion in 2009-2010.

At 1021 GMT, EDF shares were trading down EUR2.91, or 8.2% lower, at EUR32.64 while the CAC-40 benchmark index was trading down 1.9%.

"Full-year results are wholly disappointing. We see no bright spots. Pre-Tartam Ebitda fell EUR329 million short of our estimates, the provision itself is higher, and the dividend flat. The outlook does not make it any better," Kepler Capital Markets' analyst Ingo Becker explained. He rates EDF at buy.

EDF's board of directors will recommend the payment of a dividend of EUR1.28 per share for 2008, which is a "small disappointment... when everyone was expecting a EUR1.37 dividend," said a Paris-based trader who declined to be named.

EDF's Chief Executive Pierre Gadonneix said: "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."

EDF 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. 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.

The company also said that Ebitda in 2009 should grow due 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 France, sales were up 6.3% at EUR34.3 billion. 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.

In 2008, EDF launched multibillion-euro takeovers of 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.

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