The company is looking well-positioned in Europe. Sales in the U.K. jumped 22%, German sales rose 13.4% and Italian sales increased 5%.
EDF (other-otc: ECIFF - news - people ) was up 0.40 euros (52 cents), or 0.7%, to 56.90 euros ($74.67) at the close of trading in Paris.
Price increases in July in the U.K. were a big positive factor. EDF Energy supplies gas and electricity to over 5 million customers in the U.K. Despite raising the cost of gas by an average of 19% and electricity by 9.1%, the company managed to add 450,000 new accounts over the year.
A spokesman from uSwitch.com, an online comparison service, confirmed to Forbes.com that there were periods of 2006 when EDF was cheaper than its rivals.
Nevertheless, EDF may soon be drawn into a price war in the U.K. Last week, British Gas, a unit of energy supplier Centrica (other-otc: CPYYY - news - people ), said its customers could expect a cut of about 17% in gas prices and 11% in electricity. "EDF Energy's prices are continually under review," a company spokesman told Forbes.com.
EDF will probably be forced to slash its prices. According to a comparison on uSwitch.com of similar service plans offered by the two companies, their gas rates are currently roughly equal for a two-bedroom apartment in central London, but British Gas charges about 3 pence (6 cents) per KWh less for electricity. It has a lower customer satisfaction rating than EDF.
Legal victories are allowing the company to raise prices in its home market. Last year, EDF won a 1.7% increase in regulated power prices in France that started on Aug. 15. And in December, France's constitutional court, which ensures new laws are in line with the French constitution and EU law, ruled that price caps on power prices set by the government should be abolished. The ruling provided a major boost to shares of EDF, which produces, transmits and distributes about 95% of France's electricity.
The court's ruling was in line with the EU's objective to open up Europe's electricity markets to full retail competition by July 2007, which in theory should see an increase in the roster of electricity providers available to consumers.
Government-regulated power prices, the French court said, were "manifestly incompatible" with the EU's liberalizing directive. The state currently caps electricity bills for individual households and some businesses, but the court ruling stipulated that limits should only be applied for certain public service purposes, such as concessions for the poor.
Analysts believe that regulated tariffs will eventually be canceled, which would have a major positive impact on EDF's valuation as electricity prices in France would rise in line with other European countries.
Despite the movement toward higher prices in its home country, fourth-quarter sales grew slower in France than in other regions, up only 3.8%.
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