EDF, the French energy group, could be forced to sell some of its power stations in France to help to fund its £12.2 billion acquisition of Britain’s nuclear industry, it admitted yesterday.

EDF shocked investors by unveiling a fall of nearly 40 per cent in annual profits and warning that its debt pile had increased to nearly €25 billion (£22.5 billion) after a string of acquisitions, including those of British Energy, the UK nuclear generator, and America’s Constellation Energy.

Pierre Gadonneix, the chief executive, said that EDF, which is 85 per cent owned by the French State, was aiming to cut its debt by at least €5 billion by the end of 2010 and that much of this would be achieved through asset sales.

Speaking at the group’s annual results presentation in Paris, Mr Gadonneix offered few details on the planned sales but indicated that they could include some of EDF’s power stations in France. “We don’t exclude anything of the spectrum, neither in France nor abroad,” he said.

A number of foreign energy companies, including Enel, of Italy, have previously expressed an interest in entering the French power market.

EDF, the world’s biggest operator of nuclear power stations, said that total net profits slipped to €3.54 billion in 2008, compared with €5.6 billion in 2007, dragged down in part by a one-off charge linked to France’s regulated tariff regime.

The weakening global economy has also undermined industrial demand for power in many countries in which EDF operates, Mr Gadonneix said.

However, EDF’s business in the UK offered a rare ray of optimism amid the gloom. EDF Energy, the group’s UK subsidiary, announced a surge of 23 per cent in earnings, which the group said had been “driven by higher prices and tariffs” in the UK market.

EDF said that EDF Energy’s total sales were €8.2 billion in 2008 and that adjusted earnings before interest, tax and depreciation were €1.2 billion. The bulk of the earnings came from EDF’s UK distribution business, rather than its retail supply business.

EDF operates 58 nuclear reactors in France and has sizeable businesses in Italy, Germany and China. It bought British Energy last year and aims to use it to build at least four French-designed nuclear reactors in the UK.

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