The UK arm of the French energy company EDF bounced back to profit last year, making more than £1bn, as it was boosted by the rising cost of wholesale energy, which allowed it to sell the electricity it generated at a higher price.
The firm made a pre-tax profit of £1.1bn in the UK last year, before one-off items, a recovery from a loss of £21m a year earlier.
EDF, which runs Britain’s nuclear power stations, said the profit was related to stronger operational performance of its nuclear fleet, and higher energy prices.
The company is building Britain’s newest nuclear reactor, Hinkley Point C in Somerset, which has been hit by delays and climbing costs. The cost of the project was originally set at £18bn, before it was later put at £25bn to £26bn.
On Friday, EDF said that £25bn to £26bn remained the estimated cost based on 2015 calculations but “the estimated nominal cost at completion could reach £32.7bn” because of inflation.
The company, which is mostly state-owned but is being fully nationalised in France, is now the UK’s fourth-largest energy supplier, providing gas and electricity to more than 5m UK households.
EDF said Britain’s cap on energy bills hit earnings at its energy supply business, which made a loss of £200m. The company said this was because it cost it more to buy energy to supply to its residential customers than the price it was allowed to charge them under the energy price cap.
The UK profit was a rare bright spot for EDF in its annual results, which reported a record net loss of €17.9bn (£16bn) for the whole group in 2022, as its nuclear output plunged to a 34-year low after a record number of outages at its reactors in France. Stress corrosion cracks were found in pipes in the cooling systems of some reactors.
The group’s net debt rose to almost €65bn last year, up from €43bn a year earlier.
EDF’s chief executive, Luc Rémont, who was appointed by the French government last November to turn the company around, said: “Today, our priority is to put EDF back on track.”
EDF said it invested £2.6bn in the UK in 2022 in its nuclear, renewables and customer businesses.
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The company said it is investing more than £13bn in the UK between 2023 and 2025, largely in the Hinkley Point scheme.
It is also planning to invest about £2bn in its existing nuclear fleet and renewables projects this year.
It welcomed the UK government’s decision last November confirming that the Sizewell C nuclear power plant in Suffolk would go ahead, and which will be developed by EDF.
The government has taken a 50% stake in the project, which will be the second of a new generation of UK nuclear power reactors, after Hinkley Point C.
