PARIS (Reuters) - French state-controlled utility EDF said on Thursday it expected a sharp drop in its domestic nuclear power output to a record low in 2020 as a result of the fall in business activity caused by the coronavirus crisis, knocking its shares.
EDF withdrew its financial targets for 2020 and 2021 on Tuesday due to the economic turmoil caused by the coronavirus pandemic.
The company’s shares on the Paris bourse tumbled more than 6% following Thursday’s statement, leaving it at the bottom of the French SBF 120 index to be the second-biggest decliner on the pan-European STOXX 600
The shares are down nearly 27% since the start of the year.
EDF said nuclear electricity generation will drop to 300 terawatt hours (TWh) in 2020, down from an initial expectation of 375 to 390 TWh before the outbreak. It forecast a range from 330 TWh to 360 TWh each year in 2021 and 2022.
Barclays analysts said in a note that the new 2020 target would be lower than investors were anticipating.
EDF operates France’s 58 nuclear reactors that account for around 75% of the country’s electricity needs.
The company said in addition to a steep fall in demand, maintenance work at its reactors has been significantly affected by the outbreak, thereby reducing power generation capacity.
“EDF is consequently adjusting its maintenance outage plan in order to optimise output capacity,” it said in a statement.
EDF said a number of nuclear reactors may have to be taken offline this summer and autumn in order to save fuel at those power plants. It added that it was working with French power grid operator RTE to ensure continuous power supply throughout winter.
A source close to EDF’s management said the company would have to review all planned 10-year upgrades of some reactors this year, which would not be an easy task for the heavily indebted company that was already dealing with delays at major projects.
“Our goal is to make sure that the plants are able to run next winter. But if the virus comes back, then the situation will be catastrophic,” the source said, requesting to remain anonymous.
Barclays said the outlook for the European utility sector remained positive longer term.
“Relating to Covid-19 the sector appears in good shape liquidity-wise, with the main negative impacts being lower power demand and power prices, and increase in bad debts,” Barclays said.
Reporting by Bate Felix, Benjamin Mallet and Sudip Kar-Gupta; Editing by Toby Chopra and Elaine Hardcastle