Electricite de France SA will freeze hiring after strikes have undermined power output and weighed on earnings of the debt-laden utility, which already racked up record losses last year.
(Bloomberg) — Electricite de France SA will freeze hiring after strikes have undermined power output and weighed on earnings of the debt-laden utility, which already racked up record losses last year.
Labor actions at nuclear and hydropower plants have cost the utility about €1 billion ($1.1 billion) in lost output, according to people familiar with the matter who spoke on the condition they not be named. The news of the hiring freeze and the cost of the walkouts were first reported by Reuters.
EDF, which is 96% owned by the state and is in the process of being fully nationalized, has decided to put a moratorium on hiring, a spokesman for the utility said Thursday, without commenting further.
Recent labor action to protest against a government plan to increase the retirement age combined with reactor repairs have curbed nuclear output by 7.4% in the first quarter from a year earlier. That’s been straining France’s power market in recent weeks as walkouts are also limiting imports of natural gas, while European countries prepare to replenish stockpiles ahead of next winter with limited supplies from Russia.
The company’s prolonged nuclear reactor outages already exacerbated the region’s energy crisis last year by turning France — traditionally a powerhouse producer — into a net importer of electricity. As nuclear output dropped by 23% to a 34-year low, EDF was forced to buy back its production shortfall on the wholesale market as the energy crunch pushed prices to records.
As a result, the state-controlled generator incurred a net loss, excluding non-recurring items, of €12.7 billion last year, after a profit of €4.7 billion in 2021.
The strikes are complicating Chief Executive Officer Luc Remont’s task to revive the company’s output and prepare it for the construction of new reactors in France and the UK.
Remont, who was took on his new role in November, said in February that the company will target earnings before interest, taxes, depreciation and amortization for 2023 that will be “significantly higher” than the €18 billion reported in 2021.
(Updates with EDF’s estimated loss in second paragraph.)
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