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EDF Announces More Delays And Overruns For UK Plant

UTILITIES
  • Revised base case schedule for the start of electricity production service in 2030, with other scenarios listed for 2030 or 2031. This is a further 10 month delay from the last assessment in 2022.
  • Project completion costs now estimated between £31bn-£34bnin 2015 values (+£10bn from the 2022 assessment), mainly due to civil engineering costs and an extended electromechanical phase. The 2031 start scenario could add ~£1bn in costs.
  • EDF bonds have benefited from state-support post-nationalisation and group FCF, while still negative at -€1.6bn at H123, is on a positive trajectory from -€4bn in H122. Management is targeting Net Fin Debt/EBITDA ≤2.5x from 4x at H123.
  • While unlikely to entirely derail deleveraging plans, delays and overruns do risk delays in the return to positive FCF while also threatening future project flow. We note similar overruns and delays at the Flamanville plant in France, with both projects cited in the June outlook downgrade by Moody’s.

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