* Core profit up 4.8 percent, net up 7.4 percent
* Rare sign of strength as European utilities struggle
* Rejects tweaking UK nuclear contract to get EU clearance
* Focus on Europe, but sees opportunities in other areas
(Adds CEO, analyst comments, share price move)
By Geert De Clercq
PARIS, Feb 13 France's EDF posted a 4.8
percent rise in 2013 core earnings on Thursday, buoyed by tariff
hikes and strong nuclear and hydro power output in a rare show
of strength in Europe's struggling utilities sector.
State-controlled EDF said earnings before interest, tax,
depreciation and amortisation (EBITDA) rose to 16.8 billion
euros ($22.8 billion) while net profit climbed 7.4 percent to
EDF, which relies mainly on nuclear energy and hydropower to
produce electricity, has suffered relatively little from the
impact of renewable solar and wind energy, whose priority grid
access and low operating costs have priced out gas-fired power
plants in Germany and other northern European countries.
In comments to reporters, CEO Henri Proglio said EDF's
challenges are very different from those of European peers such
as French GDF Suez and Germany's E.ON and
RWE, which have formed the Magritte group to lobby
against renewables subsidies in the EU.
"I take no position on competitors whose problems are
totally different from ours," Proglio said.
GDF is expected to book writedowns when it presents
full-year results on Feb. 27. RWE took a 2013 writedown of 3.3
billion euros, more than twice its 2012 net profit, reflecting
losses at coal- and gas-fired power plants.
EDF's 2013 earnings were boosted by higher tariffs, as the
government allowed it to increase such fees by 5 percent in
August 2013 and another 5 percent this August, marking the
biggest increases in at least a decade.
Strong hydropower output in France, up 23 percent at 42.6
terawatt-hours (TWh), also helped. Nuclear output in Britain hit
an eight-year high at 60.5 TWh, up 0.5 TWh.
EDF aims for nuclear output in France of 410-415
terawatt-hours for 2014, up from 404 TWh last year.
EDF proposed an unchanged dividend of 1.25 euros per share,
beating expectations for a slight cut to 1.22 euros.
The company's shares rose as much as 5.4 percent on the
earnings, also boosted by the French prime minister's denial of
plans to cut the state's 84.4 percent stake in the utility.
"EDF's results have beaten expectations for several quarters
in a row, which gives it a certain credibility," said a
Paris-based fund manager.
Shares in EDF, Europe's biggest utility by market
capitalisation, are the best performers in the Stoxx European
utilities index, up 84 percent over 12 months, compared
to gains of 33 to 38 percent for the index's other top five
Proglio said he was confident EDF's 19 billion euro project
to build two nuclear reactors in Hinkley Point, Britain would
get the green light from the European Union.
EU antitrust chief Joaquin Almunia said last week Britain
must clarify why the project needs state aid and has sent the UK
government a letter criticising the project's planned power
price guarantees and loan support.
Proglio said EDF would "absolutely not" consider tweaking
the contract to win EU approval.
"We have negotiated, and a deal is a deal, a contract is a
contract. We will not consider changing or twisting the contract
so it can get European Commission clearance," he said. He
expects a positive answer this summer or latest this autumn.
Proglio said that, unlike peers such as Iberdrola,
E.ON and GDF, which seek growth in emerging markets as Europe
stagnates, EDF will focus resolutely on Europe.
"We are a multinational European group. Our domestic market
is Europe," he said, adding that as the number one operator in
France and Britain, number two in Italy and Belgium and number
three in Poland, EDF's mission is to remain anchored in Europe.
"We are ready to grab opportunities when it comes to other
regions or businesses in which we want to develop," he said.
Poland's embrace of nuclear power could mean opportunities
for EDF there, Proglio said.
He also expects major growth in the energy services sector,
which he said is a market worth 1 trillion euros, with growth
rates of 5 to 10 percent per year.
EDF will launch its own energy services business once it
finalises the split of its Dalkia joint venture with water and
waste group Veolia Environnement.
($1 = 0.7359 euros)
(Additional reporting by Benjamin Mallet and Alexandre
Boksenbaum; Editing Jason Neely and Dale Hudson)