PARIS (Reuters) - French utility EDF (EDF.PA) aims to make an investment decision on its 16 billion pound ($24 billion) project to build two nuclear reactors in Hinkley Point, Britain, this year but added negotiations could take a long time.
New chief executive Jean-Bernard Levy said talks with EDF’s partners -- Chinese utilities CGN and CNNC and nuclear group Areva AREVA.PA -- and the UK government were continuing and that he hoped to take a decision as soon as possible.
“We are in the final phase of negotiations, but that phase can take a considerable amount of time,” Levy said at the presentation of EDF’s 2014 earnings.
In October, the head of EDF Energy, EDF’s UK unit, had said he expected an investment decision around the end of 2014.
Analysts say there is debate about the role of the two Chinese firms, which are set to take a stake of 30 to 40 percent in Hinkley Point. EDF has said the Chinese want to be more than financiers and aim for an industrial role.
Levy also admitted that EDF, the world’s biggest operator of nuclear plants, was behind the beat in renewable energy and would do its best to catch up.
“EDF maybe was a bit reluctant at the beginning to become an important player in renewables,” he said.
In 2014, EDF Nouvelles Energies set a new record, 2.2 gigawatt, of new renewables capacity under construction and a third of EDF’s growth investment went into renewables.
“We plan to maintain this ratio this year,” Levy said.
Levy denied EDF has plans to buy into Areva and said that since he took over in late 2014 EDF had worked with Areva on nuclear fuel, the long-delayed EPR reactor construction in Flamanville, and the improvement of the EPR, which it plans to build in Britain.
“There is no question about making a financial investment in Areva,” he said.
A source told Reuters last week that Areva was drafting a plan to let EDF take a stake in some of its businesses and set up joint ventures to export reactors and recycle nuclear fuel.
Levy also said EDF’s international assets are too dispersed and there will be disposals and acquisitions to align its portfolio. He indicated EDF might sell business in which it has minority stakes or weak market positions.
EDF’s 2014 net income rose 5.2 percent to 3.70 billion euros ($4.19 billion) as nuclear output exceeded forecasts. Core earnings rose 7.3 percent to 17.28 billion euros, turnover 1.3 percent to 72.87 billion.
EDF booked 1.15 billion euros in impairments, including 406 million euros on its Belgian activities and 206 million on its stake in Swiss Alpiq (ALPH.S).
Levy said nuclear outages at Belgian Electrabel, in which EDF has a minority stake, and difficult market conditions had caused core profitability to fall 64.5 percent, which led to the depreciation.
EDF shares were down more than four percent on Thursday.
“Looking at 2014 results, the 2018 targets seem hard to achieve,” an equities trader said.
EDF expects 2015 core earnings will grow 0-3 percent and aims for a positive cash flow after dividends in 2018.
EDF stock has been sliding since the government scrapped a 5 percent tariff increase last summer. Its shares are down 11 percent over the past 12 months.
Additional reporting by Alexandre Boksenbaum-Granier; Editing by Mark Potter and Vincent Baby