EDF shares drop 6% after cut in profit forecasts

EDF shares drop 6% after cut in profit forecasts

Shares in the French state owned EDF have fallen by more than 6% after profit forecasts were cut for 2018.

Earnings before interest, tax, depreciation and amortisation are now expected to be in the range of €14.6 billion to €15.3 billion, compared to its previous estimates of at least €15.2 billion.

As a result, EDF is less confident of achieving a positive cash flow, suggesting it will be “slightly less or close to balance”.

The reason for this poor performance has been put down to reduced electricity consumption, less availability to some nuclear reactors and a decline in capacity compensation in the UK.

EDF has said it will accelerate its plans to reduce costs, that it previously announced, aiming to cut costs of €100 million by the end of 2018.

In March of this year, EDF was forced to launch a capital raise of €4 billion to relieve pressure on its balance sheets and support projects such as the £18 billion Hinkley Point nuclear power station in south-west England.

The French company’s shares were down 6.7% during Monday’s early morning trading making it the second worst performer in Stoxx 600, the Europe wide stock index.

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