{"id":60696,"date":"2024-02-16T06:49:06","date_gmt":"2024-02-16T06:49:06","guid":{"rendered":"https:\/\/news.pakistaninewspaperlist.com\/edf-2023-annual-results-substantially-higher-nuclear-power-output-in-france-good-overall-operational-performance-new-commercial-policy-net-financial-debt-reduced-trajectory-1-5c-valida\/"},"modified":"2024-02-16T06:49:06","modified_gmt":"2024-02-16T06:49:06","slug":"edf-2023-annual-results-substantially-higher-nuclear-power-output-in-france-good-overall-operational-performance-new-commercial-policy-net-financial-debt-reduced-trajectory-1-5c-valida","status":"publish","type":"post","link":"https:\/\/pakistaninewspaperlist.com\/news\/edf-2023-annual-results-substantially-higher-nuclear-power-output-in-france-good-overall-operational-performance-new-commercial-policy-net-financial-debt-reduced-trajectory-1-5c-valida\/","title":{"rendered":"Edf: 2023 Annual Results: Substantially higher nuclear power output in France – Good overall operational performance – New commercial policy – Net financial debt reduced – Trajectory 1.5\u00b0C validated by Moody\u2019s"},"content":{"rendered":"
\n

2023 ANNUAL RESULTS<\/p>\n

Substantially higher nuclear power output in France<\/strong>
Good overall operational performance<\/strong>
New commercial policy<\/strong>
Net financial debt reduced<\/strong>
Trajectory 1.5\u00b0C validated by Moody\u2019s<\/strong><\/p>\n\n\n
Performance<\/strong><\/p>\n

Sales: \u20ac139.7 bn<\/strong>
EBITDA: \u20ac39.9 bn<\/strong>
EBIT: \u20ac13.2 bn<\/strong>
Net income – Group share: \u20ac10.0 bn<\/strong>
Net Financial Debt: \u20ac54.4 bn \u2013 NFD \/ EBITDA: 1.36x<\/strong>
Adjusted Economic Debt: \u20ac86.3 bn \u2013 AED \/ adjusted EBITDA: 2.26x<\/strong><\/p>\n

\u00a0<\/p>\n

The exceptional results of the Group were driven by a very good operational performance, achieving a significant 41.4TWh increase in nuclear generation in France in a context of historically high prices. Coming after the sudden drop in nuclear power output in France in 2022 due to the stress corrosion phenomenon and exceptional regulatory measures to limit price rises for consumers, these results have reduced net financial debt.<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

In 2023, EDF began key actions for the future<\/strong><\/p>\n

New commercial policy <\/strong><\/p>\n

To give its customers more price visibility and be more competitive, the Group is rolling out a new business policy<\/strong> involving 4 and 5 year ahead auctions on the wholesale market, and medium-term power supply contracts. The Group is also developing long-term industrial partnerships relating to the historic nuclear fleet (nuclear generation allocation contracts).<\/p>\n

Supporting customers\u2019 efforts to reduce their carbon footprint: <\/strong><\/p>\n

    \n
  • Decarbonising uses: <\/strong>the 12.4 million tonnes of CO2<\/sub> emissions avoided by its customers reflect the work done by EDF to encourage greater energy sufficiency and electrification of uses. The number of heat pumps installed was up by 30%, and installations of solar panels on rooftops and car park canopies were up by 60%. In electric mobility, the number of charging stations rolled out or managed by EDF rose by 21%. <\/li>\n
  • 1.5% growth in the customer portfolio <\/strong>in the G4 countries (<\/sup>1<\/sup>)<\/sup> by end-2023. <\/li>\n<\/ul>\n

    \u00a0<\/p>\n

    Producing more low-carbon electricity:<\/strong><\/p>\n

      \n
    • In 2023 EDF was the world\u2019s number one investor and producer <\/strong>(<\/sup>2<\/sup>)<\/sup> in available on demand and constantly available carbon-free electricity, which accounted for 434TW or 93% of its total power output. EDF has one of the lowest carbon intensities in the world at 37gCO<\/strong>2<\/strong><\/sub>\/kWh, <\/strong>down by 26% from 2022.\n
        \n
      • In France, the 41.4TWh increase in nuclear power output to 320.4TWh, <\/strong>in the upper end of the range announced for the year, illustrates EDF\u2019s very good operational performance. This turnaround was achieved by good management of the stress corrosion repairs and reactor outages, thanks to efficiency and reactivity of the teams to improve the fleet availability.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

        \u00a0<\/p>\n

          \n
        • 46 reactors were online <\/strong>at the beginning of January 2024, representing total capacity of 50GW.<\/li>\n
        • 15 of the 16 reactors most sensitive to stress corrosion were repaired by end-2023, and the last one will be repaired during its 10-year inspection which starts in February 2024. Additionally, the 2023 programme of checks on welds repaired during reactor construction has been completed.<\/li>\n
        • EDF successfully launched its first green bond issue dedicated to the financing of the existing nuclear fleet,<\/strong> for a nominal amount of \u20ac1\u00a0bn.<\/li>\n
        • The estimates of nuclear output in France <\/strong>(<\/sup>3<\/sup>)<\/sup> are confirmed<\/strong> at 315-345TWh for 2024 and 335-365TWh for 2025 and 2026.<\/li>\n
        • The 6.3TWh increase in hydropower output in France,<\/strong> which reached 38.7TWh (<\/sup>4<\/sup>)<\/sup>, is explained by high availability and better hydrological conditions.<\/li>\n
        • The 14% increase in wind and solar power output to 28.1TWh<\/strong> was largely due to new installed capacities (including the 2.1GW Al Dhafra plant), bringing total net capacity to 15.1GW. The portfolio of wind and solar projects also increased by 15% to 98GW gross.<\/li>\n
        • EDF is continuing to decarbonise its thermal power generation:<\/strong>\u00a0following conversion of the Port Est oil-fired plant (212MW) to liquid biomass, EDF\u2019s power output in R\u00e9union Island is now 100% renewable.<\/li>\n<\/ul>\n

          \u00a0<\/p>\n

            \n
          • Progress continues on EDF\u2019s new nuclear projects:<\/strong>\n
              \n
            • Flamanville 3<\/strong>: the tests to requalify the entire installation were successfully completed, in preparation for fuel loading in March 2024 (<\/sup>5<\/sup>)<\/sup>.<\/li>\n
            • New nuclear in the United Kingdom:<\/strong>\n
                \n
              • Hinkley Point C<\/strong>:\n
                  \n
                • New schedule for the start of power generation by Unit 1 around 3 scenarios: 2029 (around which the project is organised), 2030 (base case) and 2031 (unfavourable scenario) (<\/sup>6<\/sup>)<\/sup>.<\/li>\n
                • Revised completion cost: \u00a331-34\u00a0bn2015<\/sub> (the unfavourable scenario would entail an additional cost of \u00a31 bn2015<\/sub>).<\/li>\n
                • Impairment of \u20ac12.9 bn booked on HPC assets and the EDF Energy goodwill (<\/sup>7<\/sup>)<\/sup>.<\/li>\n
                • Since end-2023, construction is financed by the shareholders on a voluntary basis, and EDF is currently financing all costs.<\/li>\n<\/ul>\n<\/li>\n
                • Sizewell C<\/strong>: further preparatory work on the project.<\/li>\n<\/ul>\n<\/li>\n
                • EPR2<\/strong>: applications have been filed for approval to build the first pair of EPR2 reactors at the Penly site and Bugey chosen as the site for 2 future EPR2 reactors, after Penly and Gravelines.<\/li>\n
                • EPR1200<\/strong>: EDF has been shortlisted to continue the tender process for the construction of 1 to 4 EPR1200 reactors in the Czech Republic.<\/li>\n
                • Nuward SMR:<\/strong> joint early review to develop a standardised design with an extended group of European nuclear safety authorities. <\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

                  \u00a0<\/p>\n

                    \n
                  • The Group has defined new objectives to reduce CO<\/strong>2<\/strong><\/sub> emissions, aiming to reach net zero emissions by 2050:<\/strong>\n
                      \n
                    • A reduction in its scope 1 emissions (compared to 2017) of 60% by 2025, 70% by 2030 and 80% by 2035.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
                        \n
                      • Carbon intensity of 30gCO2<\/sub>\/kWh\u00a0by 2030 and 22 gCO2<\/sub>\/kWh by 2035.<\/li>\n<\/ul>\n
                          \n
                        • By Moody\u2019s assessment (<\/sup>8<\/sup>)<\/sup>, the Group\u2019s CO<\/strong>2<\/strong><\/sub> emission reduction target is in line with a +1.5\u00b0C global warming scenario.<\/strong><\/li>\n<\/ul>\n

                          \u00a0<\/p>\n

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                          \u00a0<\/p>\n

                          \u00a0<\/p>\n

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                          Expanding the networks to address to the challenges of the energy transition:<\/strong><\/p>\n

                            \n
                          • Connections of renewable energy facilities by Enedis increased by around 120%, and the number of electric vehicle charging points rose by 80%.<\/li>\n
                          • Investments by Enedis, EDF SEI (Island Energy Systems) and Electricit\u00e9 de Strasbourg were up by 11%, essentially due to the higher number of connections and the energy transition.<\/li>\n
                          • Electricity supply was restored in 5 days for 95% of customers after the storm Ciar\u00e1n. <\/li>\n
                          • EDF SEI has crossed the milestone of one million digital meters installed at end-2023.<\/li>\n
                          • Enedis recognized first major company of the energy sector to become an \u201centreprise \u00e0 mission\u201d <\/em>in June 2023.<\/li>\n<\/ul>\n

                            \u00a0<\/p>\n

                            \u00a0<\/p>\n

                            Developing flexibility solutions to meet electricity system requirements,\u00a0via: <\/strong><\/p>\n

                              \n
                            • pumped-storage hydropower plants like the Hatta plant in the United Arab Emirates through an engineering contract (250MW \/ 1500MWh of storage), the Vouglans Saut-Mortier plant in France (87MW);<\/li>\n
                            • significant growth of 0.8GW in the portfolio of storage projects secured (to 1.7GW at end-2023);<\/li>\n
                            • battery projects (e.g. in the United Kingdom (173MW) and South Africa (257MW));<\/li>\n
                            • substantial 33% increase in electric vehicle smart charging points operated, mainly by Izi Smart Charge, depending on network constraints. <\/li>\n<\/ul>\n

                              \u00a0<\/p>\n

                              \u00a0<\/p>\n

                              At its meeting of 15 February 2024, chaired by Luc R\u00e9mont, EDF\u2019s Board of Directors approved the consolidated financial statements at 31 December 2023. Luc R\u00e9mont, Chairman and Chief Executive Officer of EDF, said: \u201c2023 marks the return of the company\u2019s operational performance at a better level, after a year of industrial difficulties and exceptional regulation unfavourable effects in 2022. With these good results, EDF has met its financial targets and reduced its financial debt. They also reflect the hard work put in by all EDF\u2019s teams to turn generation levels around, and provide appropriate sales offers for customers, and innovative solutions in response to the needs of the electricity system. Finally, 2023 saw the start of key actions for the company\u2019s future, with an intensive focus on change and efficiency improvements so we can remain the leader in carbon-free, competitive electricity production that is available at all times. I am certain that all these steps will continue to bring benefits over the next few years.\u201d <\/em><\/p>\n

                              \u00a0<\/p>\n

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                              \u00a0<\/p>\n

                              \u00a0<\/p>\n

                              \u00a0<\/p>\n

                              2026 targets <\/strong>(<\/sup>9<\/sup>)<\/sup><\/p>\n

                              Net financial debt \/ EBITDA: \u2264 2.5x<\/strong>
                              Adjusted economic debt \/ Adjusted EBITDA (<\/sup>10<\/sup>)<\/sup>: \u2264 4x<\/strong><\/p>\n

                              \u00a0<\/p>\n

                              \u00a0<\/p>\n

                              \u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

                              Key financial results:<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
                              (in millions of euros)<\/em><\/td>\n2022<\/strong><\/td>\n2023<\/strong><\/td>\nOrganic change<\/strong><\/td>\n<\/tr>\n
                              France – Generation and supply<\/td>\n-23,144<\/td>\n24,677<\/td>\nN\/A<\/td>\n<\/tr>\n
                              France – Regulated activities<\/td>\n6,723<\/td>\n3,707<\/td>\n-44.9%<\/td>\n<\/tr>\n
                              EDF Renewables<\/td>\n909<\/td>\n932<\/td>\n2.8%<\/td>\n<\/tr>\n
                              Dalkia<\/td>\n333<\/td>\n407<\/td>\n22.8%<\/td>\n<\/tr>\n
                              Framatome<\/td>\n328<\/td>\n255<\/td>\n-25.3%<\/td>\n<\/tr>\n
                              United Kingdom<\/td>\n1,325<\/td>\n3,967<\/td>\nx3<\/td>\n<\/tr>\n
                              Italy<\/td>\n1,115<\/td>\n1,855<\/td>\n65.3%<\/td>\n<\/tr>\n
                              Other international<\/td>\n336<\/td>\n872<\/td>\nx2.6<\/td>\n<\/tr>\n
                              Other activities<\/td>\n7,089<\/td>\n3,255<\/td>\n-52.2%<\/td>\n<\/tr>\n
                              Group total<\/strong><\/td>\n-4,986<\/strong><\/td>\n39,927<\/strong><\/td>\nN\/A<\/strong><\/td>\n<\/tr>\n<\/table>\n

                              The gradual recovery of nuclear power generation in France, the high-price environment in Europe (entailing a record ARENH scheme cropping price), and the absence of regulatory measures of the kind introduced in 2022 were the main explanations for the exceptional (almost \u20ac45\u00a0billion) improvement in EBITDA to \u20ac39.9\u00a0million in 2023. The other businesses\u2019 operational performances also contributed. The United Kingdom registered a good performance, particularly in sales. In Italy, most business segments contributed to this rise in EBITDA, and Dalkia\u2019s sales performance was also very satisfactory.<\/p>\n

                              The financial result for 2023 was an expense of \u20ac3.3 billion, a slight improvement of \u20ac0.2 billion from 2022 explained by:<\/p>\n

                                \n
                              • a good performance by the dedicated asset portfolio, which achieved a return of 10.2% (vs -8.5% in 2022) thanks to favourable developments on the financial markets, particularly the equity markets in 2023 leading to a \u20ac6.5\u00a0billion improvement in other financial income and expenses (with a limited cash impact);<\/li>\n
                              • a \u20ac4.2\u00a0billion increase in the cost of unwinding the discount, principally owing to stability in the real discount rate applied for nuclear provisions in 2023 after the positive impact of a 50bp rate increase in 2022 (with no cash impact);<\/li>\n
                              • a \u20ac2.1\u00a0billion increase in the cost of gross financial debt, primarily reflecting a significant increase in interest rates (with a cash effect of \u20ac1.8 billion).<\/li>\n<\/ul>\n

                                The financial result excluding non-recurring items, particularly the change in fair value of the dedicated asset portfolio, was -\u20ac5.6 billion, a decrease of \u20ac5.4 billion.<\/p>\n

                                Net income excluding non-recurring items stood at \u20ac18.5\u00a0billion, up by \u20ac31.1 billion in line with the significant growth in EBITDA after the corporate income tax expense (an income tax credit was booked in 2022).<\/p>\n

                                The Group\u2019s net income totalled \u20ac10.0 billion, up by nearly \u20ac28\u00a0billion. Apart from the large increase in net income excluding non-recurring items, the principal items after tax contributing to this change are:<\/p>\n

                                  \n
                                • the \u20ac4.0\u00a0billion change in the fair value of financial instruments;<\/li>\n
                                • \u20ac7.9\u00a0billion of impairment on the Hinkley Point C project and EDF Energy\u2019s goodwill in 2023, in view of the new schedule and additional costs announced in January 2024.<\/li>\n<\/ul>\n

                                  Cash flow for 2023 amounted to \u20ac9.3 billion, versus -\u20ac24.6\u00a0million in 2022. This is explained by cash EBITDA of \u20ac43.9\u00a0billion resulting from a good operating performance and a very high price effect. It also benefited from the closing in 2023 of trading positions taken in 2022, with an effect of \u20ac5.3 billion.
                                  Working capital requirement increased by \u20ac7.8\u00a0billion, comprising:<\/p>\n

                                    \n
                                  • \u20ac5.1\u00a0billion for optimisation of trading, mainly reflecting the repayment of margin calls as positions were closed in 2023.<\/li>\n
                                  • \u20ac3.9\u00a0billion due to the 2023 CSPE receivable generated by France\u2019s tariff shield, which was offset by lower revenues from purchase obligations in a context of declining prices, compensation payments by the French State for 2023 charges, and the regularisation of excess compensation of previous years.<\/li>\n<\/ul>\n

                                    This cash flow funded net investments of \u20ac19.1\u00a0billion, \u20ac2.7 billion more than in 2022 due notably to the Hinkley Point\u00a0C project, extensive maintenance work on the nuclear fleet, and network growth.<\/p>\n

                                    Net financial debt (<\/sup>1<\/sup>) <\/sup>totalled \u20ac54.4\u00a0billion at 31 December 2023, a decrease of \u20ac10.1\u00a0billion compared to end-2022. As well as the positive cash flow, the \u20ac2.4\u00a0billion conversion of OCEANE bonds reinforced EDF\u2019s equity.
                                    The bond issues of 2023, totalling around \u20ac8\u00a0billion, the lower level of short-term debt, and early repayments of bank loans lengthened the maturity of the Group\u2019s financial debt to 11 years at 31 December 2023 (versus 9.4 years at 31\u00a0December 2022).
                                    EDF received the 2024 International Financing Review (IFR) \u201cCorporate Issuer of the Year\u201d award for its issues in 2023.<\/em><\/p>\n

                                    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Financial results by segment:<\/strong><\/p>\n

                                    Segment sales are presented before elimination of inter-segment operations.<\/p>\n