Fifth year of losses for Areva on Finnish provisions

GMT 15:09 2016 Friday ,26 February

Arab Today, arab today Fifth year of losses for Areva on Finnish provisions

Majority state-owned Areva posted a net loss for 2015 2bn
Paris - AFP

France's struggling nuclear giant Areva saw its share price plunge in Paris on Friday after posting a fifth straight year of losses on new provisions to pay for a spat over an atomic plant in Finland and a major asset writedown.

Majority state-owned Areva posted a net loss for 2015 2 billion euros ($2.2 billion), having delayed the earnings report by a day to finalise Thursday a 1.1 billion euro bridging loan from six banks.

Share in the group were down 9 percent mid-morning at 3.35 euros in a Paris market moving ahead overall 2.05 percent.

"As expected, the operational result and the net result have been heavily impacted by new depreciations and provisions," one Parisian broker noted.

The group said it had made "significant progress" regarding talks with Finnish customer Teollisuuden Voima (TVO) regarding an arbitration suit on cost overruns and delays to the Olkiluoto OL3 reactor Areva is building.

"If this deal is finalised, the OL3 contract will be transferred from Areva NP to Areva SA within the framework of a restructuring of the French nuclear offshoot," Areva said.

An accord with the Finns would allow French electricity giant EDF, which is seeking to acquire a majority stake in Areva's reactor unit, to avoid exposure to the financial risk associated with the OL3 project.

Falling demand for nuclear power since the 2011 Fukushima disaster in Japan has hit Areva's business.

The overall 2015 loss outstripped analysts' forecasts but was smaller than its 4.8 billion euro loss in 2014.

"The 2015 results illustrate the progress we have made this year and open up favorable prospects for 2016 and the following years in view of our fundamentals," CEO Philippe Knoche said in a statement, acknowledging "a market environment that remained difficult in 2015."

Knoche said 2016 liquidity was funded and added: "Half of this loss of 2 billion euros is due to additional provisions for OL3 and half to provisions for restructuring and impairment related to market conditions" which saw its order book value slump 10.6 percent to 29 billion euros.

EBITDA, a measure of income from ordinary operations excluding exceptional items, came in at 685 million euros from 471 million in 2014 while net debt rose to 6.323 billion euros from 5.809 billion in 2014.


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