Energy supplier EDF sees UK earnings slump by 29% in 2016
Energy giant EDF saw its annual UK earnings fall by almost a third last year after a double hit of lower energy prices and intense competition from rival suppliers.
The Big Six provider – which is increasing electricity prices by 8.4% next month – said underlying operating profits fell to £470m, down 29% from £664m the previous year.
Despite losing 80,000 customer accounts over the year, the gas and electricity supplier said its overall customer base of 5.2m was “broadly stable in an intensely competitive” market.
The French-owned energy group also revealed the slump in the pound since the Brexit vote cost it £300m when UK earnings were translated into euros.
But EDF, which is building the Hinkley Point C power station in Somerset, said UK nuclear production reached its highest level since 2003 last year in an “exceptional” performance.
EDF already produces electricity from eight nuclear power stations and said the rise in nuclear energy generation in the UK came amid an ongoing investment programme that saw it pump £529m into its existing stations in 2016.
But the surge in production failed to offset a slump in nuclear prices, while EDF was also knocked by lower energy prices across the board in wholesale markets.
Wholesale prices have since risen, in particular for UK suppliers due to the impact of the pound’s plunge since the Brexit vote, and providers are hiking tariffs as a result.
EDF is among a raft of suppliers to have announced price increases, including ScottishPower and NPower.
Vincent de Rivaz, chief executive of EDF Energy, said the Hinkley project was making “good progress”, with more than 1,200 people now working on the site each day.