EDF has reported FY 2012 results slightly above our expectations. CSPE has been removed from the balance sheet, thereby reducing net debt by EUR2.4bn. The dividend has been increased to EUR1.25 from 1.15. The company is to hold a presentation meeting at 8.15am CET. Despite this solid set of results, we are reiterating our Sell recommendation, due to the group's structurally negative free cash flows before dividends, with insufficiently-high tariff hikes, making the group's debt trajectory unsustainable. As a result, restricted by its overly-high dividend policy and tariff deficit, EDF will be obliged to reduce growth capex, thereby hampering mid-term growth, and undertake dilutive asset disposals.
Full report available to subscribers
Please contact email@example.com