* Shares down 12 pct, worst performer on STOXX 600
* EDF forecasts lower 2017 earnings vs 2016
* Stock has now lost 30 pct this year
* Overcapacity, low demand depress power prices
(Adds Greenpeace action, background)
By Sudip Kar-Gupta and Geert De Clercq
PARIS, Dec 15 French utility EDF lost
more than a tenth of its stock market value on Thursday after it
warned of lower 2017 earnings due to an expected drop in power
prices and the impact of regulatory issues on its output.
EDF shares have lost nearly 30 percent this year, and hover
just above their lowest levels since their 2005 IPO, as
investors have lost confidence in CEO Jean-Bernard Levy's
ability to turn around the state-owned firm without outside help
and the government has been forced to implement a refinancing
EDF late on Wednesday set a target for 2017 core earnings
before interest, tax, depreciation and amortisation (EBITDA) of
13.7 billion-14.3 billion euros ($14.4 bln-$15 bln), compared
with analysts' expectations of around 15.8 billion and down from
its 2016 target of 16 bln-16.3 bln euros.
The company is suffering from overcapacity in the power
markets due to continuing new investment in renewable energy
like wind and solar, and is burdened by 37 billion euros of net
The world's biggest operator of nuclear plants, it also
needs to finance its 18 billion pound ($22 bln) Hinkley Point C
nuclear power project in Britain, as well as an upcoming 50
billion euro upgrade of its ageing nuclear plants and the
takeover of Areva's nuclear reactor unit, which will cost
"Although the company has made progress on its balance
restructuring programme, ongoing operational challenges related
to the French nuclear fleet along with relatively low power
prices make for a tough outlook," Jefferies said in a note.
EDF said its 2017 earnings would be lower because of an
expected decrease in French and UK power prices compared to 2016
and because of a legal requirement under which the former
monopoly provider is forced to sell up to a quarter of its
nuclear production to competitors.
The 2016 target had already been cut twice this year due to
low power prices and a string of nuclear reactor outages ordered
by French nuclear regulator ASN following the discovery of high
carbon concentrations, which could weaken their steel.
About 20 Greenpeace activists, wearing life jackets and
carrying life rafts, blocked EDF's headquarters in central Paris
on Thursday for a second day, waving signs saying "EDF is going
under". Greenpeace argues the company should focus less on
nuclear and more on renewable energy.
RECOVERY IN 2018
EDF shares closed down 12.7 percent, making them the biggest
loser on the STOXX Europe 600 index.
Barclays said in a note that EDF's EBITDA is likely to hit a
trough in 2017 but the group is on track to deliver its
medium-term strategic plan with significant opportunities for
recovery in 2018.
Gregoire Laverne, fund manager at Roche Brune Asset
Management, said he preferred the shares of French utility
"EDF once again disappointed with its 2017 outlook," Laverne
The utility is looking to sell about 10 billion euros worth
of assets by 2020, in an effort to reduce debt and free funds
for its 18 billion pound ($23 billion) project to build two
nuclear reactors in Britain and to finance its acquisition of
the engineering business of troubled nuclear group Areva
EDF also plans a 4 billion euro capital increase early next
year, to which the French government - which owns 85.6 percent
of EDF - plans to contribute 3 billion euros.
($1 = 0.9539 euros)
($1 = 0.7978 pounds)
(Reporting by Sudip Kar-Gupta and Geert De Clercq; Editing by
Andrew Callus and Susan Fenton)