EDF Profit Holds Steady as Areva Partnership Takes Shape

Net income was 2.5 billion euros ($2.7 billion), compared with a restated 2.5 billion euros a year earlier, Paris-based EDF said Thursday in a statement. The first-half 2015 net was cut by 348 million euros due to a July European Commission tax decision.

The utility kept 2015 financial and nuclear production targets. Earnings were overshadowed by the unveiling of a deal with loss-making Areva that will see EDF take over at least 51 percent and as much as 75 percent of Areva NP, a division that maintains and builds reactors and will be valued at an indicative price for the whole company of 2.7 billion euros.

The deal to reshape France’s nuclear industry will be done “without endangering the overall balance of the group,” EDF Chief Executive Officer Jean-Bernard Levy said on a conference call. The financial terms will allow EDF to “preserve its financial trajectory” and be neutral on 2018 cash flow, he said.

EDF rose as much as 2.8 percent to 21.72 euros a share before trading at 21.52 euros by 10:25 a.m. Paris time.

The company has been in government-imposed talks for months with its biggest supplier for the takeover ultimately aimed at rescuing unprofitable Areva. At the same time, EDF is grappling with a slump in European power prices and the need to fund investments of 55 billion euros through 2025 in its aging French reactor fleet as well as projects from the U.K. to China.