At a time when France intends to reconnect with the civilian atom, the financial health of EDF is worrying. And for good reason, its ability to meet the many challenges that lie ahead, between the maximum extension of the existing fleet and the construction of new EPR reactors, will be essential to enable France to succeed in its industrial bet to revive nuclear power. And will determine whether or not this carbon-free energy source will carve out a place of choice in tomorrow’s mix.
In this respect, it is clear that the group’s quarterly results, presented this Wednesday, May 4, did not reassure the markets. The EDF action has indeed fallen by 2.47%, due in particular to the prospect of a generic default which is causing the tricolor giant to falter, as the mystery remains unsolved about its possible consequences.
Net loss expected in 2022: 14 billion euros
And yet, soaring electricity prices, which have been raging in Europe for several months, have enabled EDF to increase its quarterly turnover. From 22 billion euros a year ago, it jumped to 35.6 million euros at the start of 2022, thanks in particular to the 4% increase in the regulated sales tariff (TRV) on February 1. But the good news ends there: the impact of this increase in activity will in fact be limit on its Ebitda (earnings before interest, taxes, depreciation and amortization) 2022, the group warned on Wednesday.
Because the windfall effect which he could have benefited from was quickly restrained by the public authorities: the government now requires him to increase by 20% the production which he will have to sell at a knock-down price to his competitors in 2022, via the device of the Arenh, in order to contain consumer bills. A device strongly opposed by the CEO of EDF, Jean-Bernard Lévy, since it should “cost” him 10 billion euros in lost earnings over the year.
However, the worst is elsewhere: at the very moment when the State is calling for help, the incumbent is facing a serious phenomenon, the reasons for which remain unknown. Indeed, a tiny crack recently identified in three of its reactors of different levels forces it to drastically reduce its production, and thereby to buy back the missing electrons at exorbitant prices on the market. What amputate EDF of 14 billion euros in 2022, argued during a call with analysts the group’s financial director, Xavier Girre. A figure certainly lower than the 16 billion euros estimated on March 14, but which remains colossal… and confuses investors.
Results suspended on potential new discoveries
In addition to fueling fears about the future availability of the nuclear fleet, is this phenomenon ” likely to weigh on the EDF group’s ability to achieve its objectives “, as he was worried about last March in a disturbing press release? For the time being, EDF is in any case maintaining its historically low nuclear production target of 295 to 315 terawatt hours (TWh) over the year, against 360 TWh in 2021, and 473 TWh in 2019. But foresees a return to the rise from 2023, with 300 to 300 TWh supplied to the network this year.
Still, the problem could last. Because the causes of this unprecedented anomaly remain unknown, and raise questions about its possible presence in other installations. Above all, inside the power plants themselves, the phenomenon could extend beyond the safety injection circuit, so far the only one concerned. While the Nuclear Safety Authority (ASN) had asked the electrician at the end of February to inspect other pipes throughout its fleet, EDF had thus made it known in mid-April, via a discreet update of briefing note, that ” directions suggested that Chinon B3, Cattenom 3 and Flamanville 2 could experience the same problem.
“Indications were noted during the ultrasonic checks, but we are not yet able to establish whether these are minor defects in the composition of the steel, traces of thermal fatigue or stress corrosion “, tried to clarify Wednesday Régis Clément, deputy director of the nuclear production division, in the face of many questions from analysts.
The entire park will be controlled by the end of 2023
In the meantime, the analyzes are continuing, and exchanges with the ASN are still ” In progress “, specified Xavier Girre. Before a decision key from the regulator expected at the end of the month, he added.
Concretely, the first nine reactors are shut down in order to carry out investigations, but the 56 that make up the fleet will be inspected later, via improved ultrasonic processes, and not only the emergency circuits of the primary circuit, had already assured the executive director of EDF, Cédric Lewandowski, on February 18th. This research should extend until the end of 2023, Régis Clément said on Wednesday, recalling that no control had yet been fully completed.
In addition, in addition to these extensive examinations, the repairs of the parts actually affected are likely to take a long time, and require substantial resources. EDF could indeed be forced to cut, then redo the affected pipes. But ” it is too early to give an accurate estimate of the capital expenditure that will be required “, we slip at EDF. One thing is certain: whatever the scale of the problem, the historically low availability of the fleet threatens the security of supply in France, and reminds us of the urgency of supporting the incumbent operator in the face of the difficulties it is going through.
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