French energy giant EDF has reported a substantial drop in profits for 2014, citing mild winter weather, unplanned downtime at two of its UK nuclear power plants and “challenging market conditions”.

The firm’s annual results, released this week, showed a 25 per cent drop in its operating profits, which fell to £649m. This number includes a one-off £136m charge “relating to the reduction in value of gas generating and storage assets”, the firm said.

The company’s total European profits were up by 7.4 per cent, it said, but its UK profits fell by 8.5 per cent and its Italian business was down 17.3 per cent.

August’s outages at the UK’s Heysham 1 and Hartlepool nuclear power plants were caused by precautionary shutdowns after a boiler defect was discovered. The reactors were then sidelined for months, generating around 7 per cent less power than in the previous year.

In its results statement EDF said it will announce an investment decision on the £16bn Hinkley Point C nuclear power project in the next few months.

The firm said: “EDF and the UK Government are working hard to finalize all agreements on Hinkley Point C and are making significant progress in all areas with the shared objective of finalizing documents in the coming weeks.” New CEO Jean-Bernard Levy said talks with Chinese utilities CGN and CNNC, French nuclear group Areva and the UK government are ongoing.  

The firm’s plans for financing Hinkley C have been controversial, with a potential Austrian legal challenge over subsidies in the works.

 

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