Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on EDF. We currently have 19 research reports from 1 professional analysts.
Frequency of research reports
Research reports on
€4bn capital increase terms provided
07 Mar 17
EDF has finally provided the details for its €4bn capital increase. The group will issue rights for existing stockholders to buy new shares, with investors allowed to buy three shares for every ten they own. The rights issue will be detached on 8 March 2017 and existing shares will trade ex-rights from that date. Each share will receive one right and the theoretical value of the rights is €0.77. The rights will trade on Euronext Paris from Wednesday, 8 March, through to 17 March. The subscription period for the shares will run from 10 March to 21 March. The subscription price for the new shares is €6.35, a 34% discount to the closing level on 2 March 2017 and 29% on the theoretical value of the share ex-right, i.e. €8.92/share. The €4bn capital increase at €6.35/share implies that 634.71m new shares will be issued. The delivery and first day of trading of the new shares is expected on 30 March 2017, the subscription results should be provided by 28 March.
FY16 ahead of expectations. Weak guidance and lower dividend payments expected
14 Feb 17
The company published its FY16 results which missed expectations on the revenue side with a 5.1% yoy decrease, but EBITDA reached the upper range of the revised expectations at €16.4bn (-6.7% yoy). The positive effect came from other activities, which includes services, trading, and renewables as together these showed a 22% increase in EBITDA. Operating income contracted by 3.4% due to higher provisions on the nuclear side from a 30bp reduction in the discount rate to 4.2%, generating an increase in provisions of €1,342m and €680m in financial expenses. However, adjusted net income, including hybrid payment, is ahead of expectations as it reached €3.5bn, which represents a 15% yoy contraction but is still 3.5% better than expected, representing an EPS of €1.77/share, 14% ahead of expectations. Reported net debt remained stable at €37.4bn, which is a positive, although operating cash flows decreased by 12.6% yoy to €11.1bn. Free cash flow continues to be on the negative side, but has decreased to €-1.6bn despite the scrip dividend payment. In 2016, the company will pay €2.1bn in dividends (scrip), or €1.06/share. This is above expectations and corresponds to a 60% payout ratio. For the coming years, EDF has reduced dividend payments with a payout ratio maintained for 2017 at 55-65%, but decreased to 50% in 2018, and 45-50% thereafter. In terms of guidance, this is weak as the group expects EBITDA to be in the €13.7-14.3bn range in 2017, and at €15.2bn in 2018, which is in line with our expectations, but below market forecasts. The neutral free cash flow by 2018 does not include the dividend payment, which implies a slight downward revision from previous guidance.
Profit warning on 2017 earnings
15 Dec 16
After a Board of Directors meeting held on 14 December 2016, EDF has issued another profit warning, now expected on its 2017 earnings. Despite confirming its 2016 guidance (after two profit warnings issued this year), the company has substantially revised downwards its 2017 EBITDA expectations to a range of €13.7-14bn (down -14% yoy). This is mainly driven by lower power prices in its main markets, that is the UK and France. The group expects a significant rebound in 2018 earnings. On top of a lower guidance for next year, the company expects to continue its operating expenses (opex) reduction as it targets €1bn cost cuts by 2019. Moreover, the disposal of 49.9% of the French electricity transmission network (RTE) has been signed and should be achieved by 2017.
UK revenues hurt 9m results; approval of capacity market is a positive
09 Nov 16
EDF published today its Q3 update in which the group released only its revenue numbers. These showed a 4.7% yoy decrease to €51.96bn, which represents -3.1% in organic terms. If we take out the one-off €1.02bn increase due to retroactive tariff adjustments, then the effect would have been a 5% yoy organic decrease. In France, the group achieved 0.4% in organic terms (including the tariff increase). In the UK, sales dropped 19.7% yoy and 10.4% organically due to lower prices, customer losses and lower volumes. Italy was down 6.3% and -5.8% organically, driven by lower commodity prices and lower demand, partially compensated by higher production volumes. Other activities were down 2% yoy and -3.8% yoy: EDF renewable sales were down 2.6% in organic terms, Dalkia -1.2% from lower gas prices and weather effects, while EDF trading was +6.3% yoy due to the positive performance in short-term markets in gas and electricity. Other international revenues were down 9.5% and -6.5% organically, mainly due to Belgium (-9.1% yoy) and lower gas and power prices. Guidance has been maintained (at the level of the previous downgrade made on 4 November 2016) with EBITDA expected in the €16-16.3bn range.
Concerns over French security of supply and carbon tax application
21 Oct 16
According to the press, the French government will most likely drop the current carbon tax plans. The government was planning to apply a carbon tax only to coal generation assets, but there are growing concerns over the measure being too complicated to implement given that it will be applied only to some assets. If implemented, it might be unconstitutional and not be accepted by the European Commission given that it can be considered state help for EDF in order to boost power prices and improve the profitability of lower emission assets. Moreover, EDF has been forced once again by the nuclear regulator (ASN) to close five additional nuclear reactors by the year-end to perform additional tests on the reactor vessel and steam generator of these reactors. With a third of the nuclear park already stopped in the country, there are increasing doubts over EDF’s ability to cover its supply needs over the winter and this has once again boosted wholesale prices across Europe. Driven by a spike in French wholesale electricity prices (as they are currently above the €70/MWh level) and an expected lower production from its nuclear fleet, EDF has demanded both the Minister of Economy and the Minister of the Environment and Energy to apply a temporary suspension of the ARENH mechanism (a regulated price given to competitors to buy nuclear electricity, set around €42/MWh). As a result, concerns over security of supply and a tight reserve margin for the coming winter have emerged and the output from coal and gas plants has more than doubled in recent weeks due to lower nuclear production. On the other hand, and despite the expected outages, EDF has maintained its nuclear production targets (which were already reduced twice in 2016) at 380-390TWh for 2016 and 390-400TWh for 2017. Moreover, EDF has finally provided the timeline for the five nuclear reactors outages that will be stopped for the additional testing demanded by the ASN: the period will be mainly (for four reactors) during the holiday season from 10 December 2016 to 15 January 2017, with one reactor stopped from 22 October 2016 to 19 December 2016.
UK government gives green light to Hinkley Point C
15 Sep 16
In a communique provided by the UK Department for Business, Energy and Industrial Strategy, it has been stated that the UK government has finally approved the Hinkley Point C (HPC) project. Nevertheless, the government has included some additional measures for this and on all future nuclear projects built after HPC: • no changes have been made to the contract-for-difference strike price of £92.5/MWh; • significant stakes in HPC cannot be sold without the government’s knowledge or consent; • the UK government will be able to prevent the sale of EDF’s controlling stake in the project prior to the completion of HPC’s construction; • the UK government will be able to intervene on any future sale of EDF’s stake once HPC is operational; • the UK nuclear regulator must be informed in due time of any changes in the ownership or partnership of any of the nuclear sites; • the UK government will take a special share in all future nuclear projects built after HPC.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - Augean - Double digit growth in ’16, good start to ‘17
21 Mar 17
Augean reported another year of double digit growth for 2016, with profits in line with our forecasts. Sales grew by 21% excluding landfill tax, while adjusted PBT grew by 18% to £7.1m before amortisation of acquired intangibles. DPS was increased by 54% to 1.0p, 25% ahead of our estimate. The business units made further strategic progress, with revenues from their top 20 customers increasing from 42% to 43% of the total, of which 88% was under contract or a framework agreement, increasing forward visibility. There has been an encouraging start to 2017 and management is confident of delivering another year of profits growth. The shares trade on undemanding single digit multiples, offering good value.