EDF profits surge to £1.7BILLION… just months after slapping British customers with 10.8% bill hike

• EDF profits surge 7.5 per cent to £1.7bn
• Bumper profits announced just days after EDF is named by Ofgem as the most complained about of the 'big six' energy firms

Energy giant EDF saw its UK profits surge by 7.5 per cent to £1.7billion in 2012, it announced today, just weeks after slapping its British customers with a 10.8 per cent average hike in bills.
Household budgets are being squeezed harder than ever this winter after all 'big six' energy firms put up their prices, taking average annual energy bills to £1,336 for those paying by cash and cheque and £1,247 for direct debit customers.   
The price hikes have pushed a further 300,000 UK households into fuel poverty, taking the total to 7.5million according to the Fuel Poverty Advisory Group.

Under fire: EDF got 8,072 complaints for each 100,000 customers in the final quarter of last year

EDF insists household gas and electricity sales remain loss-making, with earnings driven instead by the generation business. But the mammoth earnings figure will nevertheless spark fresh questions about why EDF introduced double-digit price hikes just as winter set in.

EDF’s results come a day after Bank of England Governor warned the UK’s stubbornly high rate of inflation was here to stay thanks in part to soaring energy bills.

 

 In a separate report, the punitive level of inflation in the UK was shown to have brought back real earnings to the same level as they were in 2003.
The attack from rising prices on UK households' income and savings has squeezed spending power for the last three or four years as salaries have been frozen and savings rates slashed.

Although consumer prices index inflation has been at 2.7 per cent since October ONS data revealed this week that households have suffered faster rises among essential items such as energy bills, food and rent.

Why prices have risen: Rising electricity, gas and other fuel prices are having a considerable impact on inflation (Source: Bank of England)

Today's profit announcement by EDF also arrives just days after it was named by regulator Ofgem as the most complained about among the top energy suppliers.

It received 8,072 complaints for each 100,000 customers in the final quarter of last year, more than double the 4,001 logged for the second most complained-about firm npower.
EDF also came second from the bottom in a recent customer satisfaction poll about gas and electricity suppliers by consumer group Which?.

Inflation woes: Consumer price index inflation is likely to rise over the next couple of years before falling again, according to the latest forecasts (Source: Bank of England)

The company said its UK profits followed a leap in generation output last year, with its best performance from nuclear operations in seven years and a 37 per cent jump from its coal-fired plants, helped also by rising wholesale prices.
The generation arm, which accounts for around 95 per cent of UK earnings, has been offsetting losses at its residential UK business, which fell into the red by £124million in 2011.

Household squeeze: Average annual energy bills are running at £1,336 for those paying by cash and cheque and £1,247 for direct debit customers

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 added it re-invested £1.3billion into its services and nuclear and coal stations, up £200million on 2011.

Revenues at EDF's UK arm rose 6.4 per cent to £8.4billion in 2012. Results for the wider EDF group showed the firm made €16.1billion (£13.8billion) in profits last year, up 7.7 per cent 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.'

It announced in December it was extending the lifespan of its Hunterston and Hinkley Point nuclear plants by seven years to 2023.

The group is currently in talks with the UK government over investment for a new multi-billion pound nuclear reactor at Hinkley Point in Somerset, which is expected to cost around £7 billion. It also plans to build a reactor in Sizewell, Suffolk.