de France unveils poor 2001 result
FT.com, March 31, 2002
By Victor Mallet, in Paris
Electricité de France, the state-owned French energy group criticised
protecting its home market while investing in liberalised markets abroad,
has unveiled 2001 results that show the financial dangers of its foreign
EDF's net profit declined 26 per cent to €841m from €1.14bn
in 2000, in
spite of the company clawing back €1.1bn in provisions because
successful renegotiation of its nuclear fuel reprocessing contract with
Cogema, the French nuclear group.
Much of the blame for the fall in net profit lay in Latin America,
EDF's operations in Argentina and Brazil lost €545m after foreign
losses of €702m.
A further negative contribution of €781m from currency translation
adjustments brought the total impact on EDF's equity to €1.33bn.
bill EDF has paid for the Latin American crisis," said Jacques
chief financial officer.
In addition, EDF took a €170m hit to its bottom line from EnBW,
group in which it has a 34.5 per cent stake. Although EnBW was profitable
under German accounting conventions, the application of French accounting
rules and various write-offs by EDF weighed on the French group's 2001
"It's the first year that the foreign subsidiaries haven't made
contribution," said Mr Chauvin, "and it's largely because
of Latin America."
EDF, however, is determined to compensate for the Brussels-enforced
of the French energy market by increasing its international presence.
year, EDF's like-for-like turnover rose 8.2 per cent, partly because
new contribution of EDF Trading, but the overall figure was up 18.3
to €40.72bn as a result of the group's foreign acquisitions.
The company says it on target to have 50 per cent of revenues coming
operations other than French electricity by 2005, with the proportion
reaching 35 per cent last year.
EDF has a three-year programme to invest €19bn on international
investment, of which €8bn has already been allocated. "Our
priority is Europe," said François Roussely, EDF chairman.
He rejected suggestions that the company was prepared to overpay for
purchases, saying that it had been buying at "market prices"
of 7-8 times
ebitda (earnings before interest, tax, depreciation and amortisation),
others had paid 11 or 12 times ebitda.
Mr Roussely declined to be drawn on plans for the partial privatisation
EDF, widely regarded as inevitable after this year's French presidential
legislative elections. "I am concerned with the opening of the
with the opening of our capital," he said.
EDF's accounts were flattered by a €652m exceptional gain, mainly
property sales, compared with a gain of just €71m the previous
year. But the
company said it had suffered from being obliged to buy electricity from
renewable energy sources, and from a tax charge that rose to €577m
Net debt rose to €22.2bn from €17.6bn, mostly as a result
of EDF's recent