EDF’s chief executive has hailed the “remarkable” financial performance of the world’s leading nuclear energy supplier by kilowatts, as he braces himself for a French presidential election that will determine both his and the company’s future.
Henri Proglio – one of France’s most powerful businessmen – said the electricity group increased non-recurring net income by 13 per cent in 2011 to €3.52bn despite the “troubled environment” in which it was operating, including the aftermath of the Fukushima nuclear disaster in Japan and the eurozone debt crisis. Its nuclear plants in France and the UK performed well.
He insisted the company would meet ambitious 2011-2015 financial targets despite an extra €10bn of spending to meet strict safety guidelines following Fukushima.
The earnings offered Mr Proglio his last chance to outline the improvements he has made to EDF before the elections in April and May. François Hollande, the socialist frontrunner, is planning to close 24 of EDF’s fleet of 58 French reactors by 2015 should he win power.
Speculation is rife that the position of Mr Proglio, a close ally of president Nicolas Sarkozy, would be untenable should Mr Hollande win power. The French state controls EDF.
Mr Proglio had “nothing to say about the statements of any politician” ahead of the election, though he has been vocal about the threat of unemployment and rising electricity bills should France abandon atomic power.
As well as his bullishness about the company’s immediate prospects, Mr Proglio drew attention to his achievements during his time in charge, which have included cutting debt and either selling out of or taking full control of a string of underperforming joint ventures. He said “availability” of EDF’s plants was at a record level.
EDF said it was sticking to 2011-2015 targets for growth in earnings before interest, tax depreciation and amortisation of between 4 per cent and 6 per cent. Net debt, currently €33.3bn, would stay below 2.5 times ebitda in the same period.
Mr Proglio said capital spending would remain at or below €15bn in 2015 despite the post-Fukushima costs. Europe’s biggest electricity generator cautioned, however, that it had “yet to finalise” a new 10-year investment plan. Investors are worried about capital spending running out of control.
EDF reported a better than expected 6.6 per cent rise in ebitda to €14.8bn. Sales rose 2.7 per cent €65.3bn. Non-adjusted net income, excluding one-offs, trebled to €3bn.
He also highlighted EDF’s diversification into gas and its expanding wind and hydropower businesses. A new deal to take control of Edison, a large Italian power producer, would be the “development platform” for EDF’s gas business, highlighting Italy’s “geostrategic importance” in southern European gas supplies.