EDF sees UK earnings fall 29% in 'intensely competitive' energy market

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Gas and electricity giant EDF has seen annual UK earnings slump by 29% after suffering intense competition from rival suppliers and lower wholesale energy prices.

The Big Six provider, which is increasing electricity prices by 8.4% next month, said underlying operating profits fell to £470 million last year, down from £664 million the previous year.

It lost 80,000 customer accounts over the year, but said its overall customer base was "broadly stable in an intensely competitive" market, at 5.2 million.

The French-owned energy group also revealed that the slump in the pound since the Brexit vote cost it £300 million when UK earnings were translated into euros.

But EDF, which is building the Hinkley Point C power station in Somerset, said UK nuclear production reached its highest level since 2003 last year in an "exceptional" performance.

EDF, which is 85% owned by the French government, already produces electricity from eight nuclear power stations, though the Hinkley project will be Britain's first new station in two decades.

It said the rise in nuclear energy generation in the UK came amid an ongoing investment programme that saw it pump £529 million into its existing stations last year.

But the surge in production failed to offset a slump in nuclear prices, while EDF was also knocked by lower energy prices across the board in wholesale markets.

Wholesale prices have since risen, in particular for UK suppliers due to the impact of the pound's plunge since the Brexit vote, and providers are hiking tariffs as a result.

EDF is increasing its electricity prices in March, although it cut gas tariffs by 5.2% in January.

A raft of other suppliers have also recently announced price increases, including ScottishPower and NPower.

Vincent de Rivaz, chief executive of EDF Energy, said the Hinkley project was making "good progress", with more than 1,200 people now working on the site each day.

He said: "The exceptional performance of EDF Energy's existing nuclear power stations is making a huge contribution to security of supply and providing large volumes of reliable, low carbon electricity.

"Our new nuclear power station at Hinkley Point C will play a vital role as the UK continues to make the transition away from fossil fuels."

EDF employs around 13,000 people across the UK.

Group-wide results showed EDF's underlying earnings fell 4.8% to 16.4 billion euros (£14 billion).