Research Update: Electricite de France Downgraded To 'BBB' From 'BBB+' On Strong Debt Increase In 2022-2023; Outlook Negative

On Feb. 18, 2022, French integrated power utility Electricité de France S.A. (EDF) guided for a sharp EBITDA deterioration in 2022, which we estimate at €5 billion-€7 billion. This results from the projected low nuclear output for 2022, on corrosion (or suspicion of) defects identified on 11 reactors currently, and the regulatory measures announced by the government on Jan. 13 to limit price increases for EDF's customers. EDF further revised down its 2023 nuclear output by about 40 terawatt-hours (TWh) to reflect the delays in maintenance and 10-year inspections combined with extensive control on the entire fleet for similar defects. The group announced a series of financial measures to mitigate the 2022 massive loss, but we are still projecting debt

...- On Feb. 18, 2022, French integrated power utility ElectricitT de France S.A. (EDF) guided for a sharp EBITDA deterioration in 2022, which we estimate at 5 billion-7 billion. This results from the projected low nuclear output for 2022, on corrosion (or suspicion of) defects identified on 11 reactors currently, and the regulatory measures announced by the government on Jan. 13 to limit price increases for EDF's customers. - EDF further revised down its 2023 nuclear output by about 40 terawatt-hours (TWh) to reflect the delays in maintenance and 10-year inspections combined with extensive control on the entire fleet for similar defects. - The group announced a series of financial measures to mitigate the 2022 massive loss, but we are still projecting debt to increase by more than 15 billion over 2022-2023. - We therefore lowered our long-term issuer credit and issue rating on EDF to '###' from '###+' and our long-term rating on EDF's U.K. subsidiaries, Energy PLC and EDF Energy Customers...

Research Update