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EDF says 2006 net income rose 75% on higher power prices

Electricite de France SA, Europe's biggest power generator, said 2006 profit rose 75% because of higher power prices outside its home market.

The Paris-based operator of France's 58 nuclear power plants reported full-year net income of €5.61 billion ($7.37 billion) compared with €3.2 billion a year earlier. That was higher than the median estimate of €4.4 billion of 10 analysts surveyed by Bloomberg News. Profit was buoyed by „rising prices from European businesses outside France, where Electricite de France SA was better able to pass along rising energy prices,” said Amit Khanna, an analyst at HSBC Holdings Plc in London, before the results were published.
EDF won a 1.7% increase for regulated power prices in France starting on August 15 and said it would raise household prices in the UK by 8% in July. France is the Paris-based utility's largest market, with four times the sales of Britain, its next-biggest. A large part of the utility's income depends on regulated prices, making it susceptible to changes in government policies.
Before the French presidential elections in April, analysts said, EDF's share price may be volatile because of the possible changes by a new government to energy policy. „A Socialist victory in the presidential elections would be bad news for EDF and could lead to the suspension of any tariff rises at all,” Citigroup Inc. analysts wrote in a research report published February 13. A victory by the ruling party would probably maintain the status quo on prices. The bank has a „buy” rating on EDF. (Bloomberg)