EDF to slash €500m in costs amid €3bn asset sales
French energy giant EDF plans to cut operating costs by €500m up to 2022 and to generate €3bn from asset sales to combat slipping profits, it said today.
EDF reported a fall in net profit in the first half of 2020 due to the coronavirus outbreak.
The company said it planned the asset sales over the period 2020 to 2022 and would keep its net investments stable at around €15bn on average annually until 2022.
Chief executive Jean-Bernard Levy told analysts: “I’m confident that EDF will be able to achieve the additional targets.”
EDF has recently completed a €10bn asset sale programme.
The company’s net income was down 9.6 per cent to €1.3bn in the six months to June, while sales fell during the period by 4.9 per cent to €34.7bn.
“Despite the economic downturn, the impact of the crisis on our main financial indicators remains contained, attesting to the resilience of our group,” Levy said in a statement.
EDF’s earnings before interest, taxes, depreciation and amortisation (Ebitda) took a €1bn hit as of the end of June 2020, mainly due to lower nuclear output, a drop in demand and postponement of work and service activities.
Core earning for the first half of the year were down 1.6 per cent at €8.2bn.
EDF, which withdrew its 2020 and 2021 financial targets in April due to the turmoil caused by the pandemic, said it now expected its Ebitda for 2020 at between €15.2bn and €15.7bn.
Analysts at Jefferies, which has a “buy” rating on EDF, said the target was in line with market expectations.
EDF’s shares rose three per cent in early trading before slipping 0.4 per cent by 10.30am.