EDF profit up 7.5% after bills hike

EdfUtility giant EDF has fuelled questions over mammoth energy profits after it revealed a £1.7 billion earnings haul just two months after hitting 3.7 million British households with a hike in bills.

The French-owned supplier said UK underlying profits leapt 7.5% in 2012, but insisted its gas and electricity residential arm remained loss-making, with the performance driven instead by the generation business.

Details of the profits rise will not sit well with EDF's domestic customers, who saw bills rise by 10.8% on average in early December.

The results also come after EDF was named by regulator Ofgem as the most complained about of the "big six" energy firms at the end of last year.

EDF received 8,072 complaints for each 100,000 customers in the final quarter of the year, while in March last year its sales tactics came under fire after Ofgem found the group's staff had been making misleading claims to customers, leading to a £4.5 million settlement.

Revenues at EDF's UK arm rose 6.4% to 9.7 billion euros (£8.4 billion) in 2012.

Adam Scorer, director of policy at Consumer Focus, called for greater transparency between prices and profits in the utility sector. "Greater transparency about industry costs and company profits is going to be critical if consumers are to have confidence in an energy market where prices just seem to go one way," he said.

EDF said the UK profits followed a leap in generation output last year, with its best performance from nuclear operations in seven years and a 37% jump from its coal-fired plants, helped also by rising wholesale prices.

The generation arm, which accounts for around 95% of UK earnings, has been offsetting losses at its residential UK business, which fell into the red by £124 million in 2011. EDF added it re-invested £1.3 billion into its services and nuclear and coal stations, up £200 million on 2011.

Vincent de Rivaz, EDF Energy chief executive, said: "Our financial performance last year enabled us to make significant investments in both our existing power stations and our plans for new nuclear stations in the UK, which will help keep the lights on in future with reliable, secure and low carbon energy."