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EDF returned to profit at its UK operations last year as the war in Ukraine continued to drive up wholesale energy costs
EDF returned to profit at its UK operations last year as the war in Ukraine continued to drive up wholesale energy costs.
The French energy company said underlying profit was £1.12 billion, compared to a loss of £21 million in 2021. It adds to the range of bumper earnings for energy companies.
EDF is 84 percent owned by the French state and will be fully nationalized within weeks.
The company is one of the largest players in the UK, supplying gas and electricity to around 5 million UK households.
It operates five nuclear power stations in the UK and invested more than £2.6bn in its nuclear, renewables and customer businesses by 2022.
In black and white: the French energy company said underlying profit was £1.12bn compared to a loss of £21m in 2021
Not relying on gas to produce power, EDF has benefited from higher electricity prices in wholesale markets, which has allowed it to increase its revenues.
EDF plans to invest a further £13bn over the next three years, mainly in Hinkley Point C, the nuclear power station being built in Somerset.
But the company warned yesterday that this new site, due to open in 2027, could cost as much as £33bn due to delays and overruns.
Setbacks and delays at Hinkley Point C had already pushed the estimated cost to £26bn, from £18bn when the controversial project was greenlit in 2016.
For the large group, the picture was bleak. The company posted a record annual loss of £16bn in 2022, making it the third-largest ever loss by a French company.
Boss Luc Remont, who was appointed by the French government last November, said: “Today our priority is to get EDF back on track”.
After the outbreak of war in Ukraine, President Macron imposed an energy price cap to protect French consumers.
This limited energy companies to a 4 percent increase in 2022, followed by 15 percent in 2023.
While the limit kept inflation lower in France, it meant that state-owned company EDF was forced to sell electricity at a deep discount to its competitors.
Emmanuel Autier, a partner at the consulting firm BearingPoint, said this was a strategic move to protect consumers.
He said, ‘The [French] government decided to take the loss at EDF level instead of government level after Covid. It dug a big hole in EDF to protect consumers.”
The appalling results come just a day after rival Centrica, owner of British Gas, announced £3.3bn in profit over the past year.
They were driven by gas production in the North Sea, nuclear energy and extreme volatility in wholesale markets, again driven by the Russian invasion of Ukraine.
British Gas contributed just £72 million to Centrica’s total profits last year. But the windfall has sparked controversy over why these winnings weren’t used to lower bills.
Other commodities giants Shell, BP and Glencore have all made huge gains in recent weeks.