The European stock market votes for nuclear power

posted in: Energy, Finance sector | 0

EDF, the world’s largest quoted electric utility company, is also the leading operator of nuclear power stations, most of them in France but it now plans to build two in the UK. Nuclear power has had a somewhat volatile relationship with the stock market in the past, particularly in the UK. But if the last year’s share prices are anything to judge by, the market likes nukes.

EDF’s share price has risen by about 85% in the last year. By contrast, the two major German utility companies, E.ON and RWE have had a miserable time. RWE revealed a net loss of €370m in its latest quarterly earnings statement, compared with a profit of €296 m a year earlier. E.ON about the same time confirmed that underlying profits had halved. Both companies are suffering from the effects of Germany energy policy: falling power prices from the increase in wind power on the system and the early phase-out of nuclear stations (which they both own).

EDF, facing a stable but mature home market in France, has investments in various low or zero carbon energy, chiefly nuclear of course. The announcement of the €14bn Hinkley Point C project in the UK was greeted calmly by the market, suggesting the details were fully in line with what the company had been preparing the market for. It seems that EDF has been doing a good job in satisfying its shareholders, including the French government which owns 84% of the shares.

Source: Bloomberg
Source: Bloomberg

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