September 29, 2017 / 7:13 AM / in a year

EDF shares extend losses as Exane cuts rating on stock

PARIS, Sept 29 (Reuters) - Shares in French state-controlled power group EDF fell for a second day in a row, as brokerage Exane BNP Paribas cut its rating on the stock after EDF announced the temporary closure of its Tricastin nuclear plant.

EDF shares were down around 1 percent in early session trading, among the worst performers on France’s SBF-120 equity index.

The stock also extended losses from a 2.2 percent decline on Thursday when EDF announced the temporary shutdown of all four reactors at Tricastin after France’s nuclear regulator identified flaws at the site.

Exane BNP Paribas cut its rating EDF to “underperform” from “neutral”, citing concerns over EDF’s nuclear availability and its balance sheet.

“As the temporary closure of Tricastin demonstrates, EDF’s nuclear availability cannot be taken for granted,” Exane’s analysts wrote in a note.

“With French yields having stayed low for one more year, EDF’s nuclear liabilities will likely face further upward pressure. Although the group is ahead of target on its disposal programme, the negative free cash flow (FCF) position leaves still little room for manoeuvre,” they added.

EDF shares remain up by around 17 percent since the start of 2017, outperforming a 10 percent gain on France’s SBF-120 index. (Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon)

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