EDF’s UK earnings take hit from Brexit hit pound and falling energy use
16th February 2018 | Residential Energy
EDF has reported a 33% drop in UK earnings despite hiking gas and electricity prices, having taken a hit from the Brexit-hit pound and a drop in customer energy use. The French energy firm said underlying earnings for its UK business tumbled from 1.7 billion euro (£1.5 billion) to one billion euro (£889 million) over the year to December 31, while sales edged lower by 0.8% to 8.6 billion euro (£7.6 billion).
Electricity consumption dropped by around 1.9% – particularly among residential customers – while natural gas use slumped 2.6%, with EDF chalking it up to “rising energy efficiency” and warming weather in the UK in 2017. The company also reported that the number of residential customer accounts declined “only slightly” in 2016, which it took as a signal of “resilience in a highly competitive market.”
EDF changed customer prices twice last year, having initially reduced gas tariffs by 5.2% in March but later hiking them by 5.5% in March but later hiking them by 5.5% in June, and raising electricity prices first 8.4% and then a further 9%.
Sales were also knocked by the weaker sterling exchange rate, which had “unfavourable impact” of 608 million euro (£540 million), the company said. But the decline in UK sales, it added, was largely due to “lower realised prices for nuclear power” as well as the drop in residential consumer energy use.
For the group as a whole, sales fell 2.2% to 69.6 billion euro (£61.8 billion) while underlying earnings fell 16.3% to 13.7 billion euro (£12.2 billion), but the company cheered its annual performance for being in line with expectations. That was “despite the decline in nuclear and hydropower output in France and the unfavourable price conditions in almost all geographic areas where the Group is active.”
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