nuclear-news

Tough times for nuclear giant AREVA – shares plunge, sales wither

Areva’s stock plunges on sales warning, solar exit  PARIS, Aug 1 (Reuters) – Shares in French nuclear power group Areva closed 20 percent lower on Friday, the worst fall since the company was formed in 2001, as it posted a first-half loss, exited a thermal solar power business and cut sales targets.

The shares were down by as much as 23 percent earlier in the session with trading the busiest by volume since late February, when Areva posted a net loss of nearly half a billion euros.

Chief Executive Luc Oursel dropped a long-held target to sell 10 nuclear reactors by 2016, saying it would “take a few more years” and the firm warned that 2014 revenue would fall 10 percent, more than the 2-5 percent decline forecast in February.

Areva, which has not sold a new nuclear reactor since 2007, hopes French utility EDF will get the green light from European Union competition authorities this year to build two Areva reactors in Britain, but its reactor sales are suffering badly from the aftermath of the 2011 Fukushima disaster.

Billions of cost overruns and multi-year delays in four projects involving its flagship EPR reactor have also hit the state-owned firm’s image, whileRussian, Korean and American reactor builders are winning orders at its expense……..

Revenue fell 12.4 percent to 3.89 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) more than halved to 226 million euros from 487 million.

Oursel said the nuclear market environment had further deteriorated as constructionprojects for new reactors abroad as well as reactor overhaul operations in France had been delayed.

As a supplier to the utilities industry – which is suffering from overcapacity and slack power demand – Areva is feeling the impact of its customers’ efforts to cut costs and is trying to make savings itself to restore profitability.

The firm hiked its cost cut target to 1.2 billion euros from 1 billion and said it would cut 1,500 jobs in Germany by the end of 2015, as well as 200 jobs in the United States this year. It had earlier warned of 1,200 to 1,500 job losses in Germany. http://uk.reuters.com/article/2014/08/01/areva-results-idUKL6N0Q71IK20140801

August 4, 2014 - Posted by Christina Macpherson | business and costs, France