Renewables boost profits at energy firm EDF

Power giant Electricite de France (EDF) said today that its profits rose 4.6% in the first half of the year as growth in renewable energy offset lower nuclear output.

The state-controlled utility also said it saw an 8.2% jump in sales to 36.2 billion euros (£28.3 billion). For the January-to-June period, net income was 2.8 billion euros (£2.2 billion).

The results pushed the company's shares up 1.4% in early trading on the Paris bourse.

The increase in profits and sales came despite more planned outages at nuclear plants - and also unexpected extensions of those outages - this year than last.

The company's chief financial officer, Thomas Piquemal, said those issues should be resolved by August.

Hydropower, which struggled last year, and other renewable energies made up the difference. Excluding one-off charges, the group's net income grew 10.3%.

Executives said the group's better-than-expected results were also due to a reduction in costs. Mr Piquemal said the growth in operating expenses was less than inflation in France - an indication of its cost control.

But chief executive Henri Proglio warned that the second half of the year would be more "complicated".

The company aces challenges in Italy in particular.

EDF took over Italian power company Edison earlier this year and has to renegotiate staff contracts there. EDF is also renegotiating gas contracts in the country, where falling consumption is putting pressure on margins.

Nevertheless, the company reiterated that it expects its net income excluding non-recurring items to grow by 5% to 10% this year.

AP