EDF profits hit £1bn as energy prices rockets over war in Ukraine

EDF returned to profit last year at its UK business as the war in Ukraine continues to push up the cost of wholesale energy.

The French energy business said underlying profit was £1.12billion, compared with a loss of £21m in 2021. It adds to the string of bumper earnings for energy companies.

EDF is 84 per cent owned by the French state and will be fully nationalised in a few weeks.

The company is one of the major players in the UK, supplying gas and electricity to about 5m UK households.

It operates five nuclear power stations in the UK and invested more than £2.6billion in 2022 in its nuclear, renewables and customer businesses.

In black and white: The French energy business said underlying profit was £1.12billion, compared with a loss of £21m in 2021

Because it doesn’t rely on gas to produce power, EDF has benefited from higher electricity prices across wholesale markets, allowing it to boost revenues. 

EDF plans to invest a further £13billion in the next three years, mainly at Hinkley Point C, the nuclear power station being built in Somerset. 

But the firm warned yesterday this new site, which is due to open in 2027, could cost as much as £33billion due to delays and overruns.

Setbacks and delays at Hinkley Point C had already pushed its estimated cost to £26billion, from £18billion when the controversial project got the go-ahead in 2016.

For the group at large, the picture was bleak. The company notched up record annual losses of £16billion in 2022, making it the third biggest loss ever by a French company.

Boss Luc Remont, who was appointed by the French government last November, said: ‘Today, our priority is to put EDF back on track’.

Following the outbreak of war in Ukraine, President Macron imposed an energy price cap to shield French consumers.

This limited energy companies to a 4 per cent rise in 2022 followed by 15 per cent in 2023.

While the cap kept inflation lower in France, it meant state-owned EDF was pushed to sell electricity at a big discount to its competitors.

Emmanuel Autier, a partner at the BearingPoint consultancy, said this was a strategic move to protect consumers.

He said: ‘The [French] government decided to take the loss at EDF level rather than at government level after Covid. It dug a big hole in EDF to protect the consumers.’

The dire results come just a day after rival Centrica, which owns British Gas, unveiled £3.3billion profits for the past year.

They were driven by its North Sea gas production, nuclear power and extreme volatility in wholesale markets, again driven by Russia’s invasion of Ukraine.

British Gas contributed only £72m to Centrica’s overall profits last year. But the windfall has sparked controversy about why these profits weren’t used to bring down bills.

Other commodity giants Shell, BP and Glencore have all notched up huge profits in recent weeks.

This post first appeared on Dailymail.co.uk