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EDF reports sales fall as AGM looms

Do Not UseDo Not Use 11/05/2016
Hinkley Point: investors want answers from EDF management © Getty Images Hinkley Point: investors want answers from EDF management

French energy giant EDF says sales fell 7% in the first three months of the year in the face of stiff competition, a mild winter and lower energy prices.

The figures come ahead of Wednesday's AGM where investors will quiz management over their plans for the Hinkley Point nuclear plant in the UK.

EDF, 85% controlled by the French state, has struggled to find the cash for its 66.5% stake in the project.

In April it pushed a final decision on the £18bn plant back to September.

Chief financial officer Thomas Piquemal resigned in April following an internal disagreement over whether to press on with the controversial project.

However, EDF has outlined plans to raise €4bn, with up to €3bn provided by the French government.

Tough markets

Credit rating agencies are due to assess the group in the coming days and their verdict on its finances will determine how easy it will be for the group to raise cash.

Meanwhile, tough market conditions mean EDF is cutting costs and planning to sell €10bn in assets by 2020, including a stake in French power-grid operator RTE.

On Tuesday the new chief financial officer Xavier Girre, said the management was not considering spinning off any part of the group to raise money.

Its latest earnings report shows it has reduced its target for 2016 nuclear output to 408-412 terawatt-hour from 410-415.

The scaling down of its output reflects continuing problems at its Paluel nuclear facility in France where a steam generator collapsed during maintenance.

Sales fell 7% to €21.4bn in the first three months of the year, with sales in the UK down 9.8%.

The company said its earnings forecast for 2016 remained on track.

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