French nuclear technology company Areva has announced a €2.0 billion ($2.2 billion) net loss for 2015 due to additional provisions for the delayed completion of the Olkiluoto 3 EPR as well as impairments for restructuring and weak market conditions.
The company said today that revenue increased 1.9% on a like-for-like basis to €4.2 billion in 2015, while earnings before interest, tax, depreciation and amortisation rose 45% to €685 million. Areva reported a net loss of €2 billion for 2015, compared with a loss of €4.8 billion in 2014.
"The group's competitiveness plan had a very positive impact on costs and cash, despite the heavy net loss situation which continues and in a market environment that remained difficult in 2015."
CEO of Areva
As of the end of 2015, Areva had a backlog of €28.9 billion, down from €32.1 billion at the end of 2014. This, it said, represents almost seven years of revenue. The order intake totalled €2.5 billion in 2015, down from €6.7 billion the year before.
The group had consolidated revenue of €4.2 billion at the end of 2015, up 6.2% year on year. Revenue in France totalled €1.7 billion in 2015, up 4.6%. Areva had an operating loss of €1.4 billion last year, compared with a loss of €2.1 billion in 2014.
Areva CEO Philippe Knoche said, "The 2015 results illustrate the progress we have made this year and open up favourable prospects for 2016 and the following years in view of our fundamentals. The group's competitiveness plan had a very positive impact on costs and cash, despite the heavy net loss situation which continues and in a market environment that remained difficult in 2015."
He noted, "Half of this loss of €2 billion is due to additional provisions for Olkiluoto 3 and half to provisions for restructuring and impairment related to market conditions."
Areva said it took a €905 million charge related to the Olkiluoto 3 project in Finland. "This additional loss reflects in particular: extra operating costs; increased costs and contingencies for the test phases; and, the probable impact of initiated discussions with the customer aimed at ensuring the completion of the Olkiluoto 3 project and to settle the disputes."
The company said that if an agreement is reached with TVO, the Olkiluoto 3 contract will be transferred from Areva NP to Areva SA "within the framework of the restructuring of the French nuclear industry". It noted, "All parties consider that preliminary discussions have proceeded positively."
Areva anticipates a loss of between €1.5 billion and €2 billion from company operations in 2016. "This sharp decline is explained by the impact of the remedial measures taken, by expenses to be incurred on the large projects, and by the unfavourable change in working capital requirements," the company said. "This range takes into account the uncertainties related to operating contingencies and to the implementation of the contemplated capital structuring plans."
In late-July 2015, EDF and Areva announced they had signed a memorandum of understanding that sets out the principal terms and conditions for EDF to take a majority share in Areva NP. Areva will continue to hold a stake of between 15% and 25% the reactor business. Late last month, EDF's board agreed on a final valuation of Areva NP's activities at €2.5 billion leading Areva's board to give a mandate to Knoche to finalize negotiations on the transaction.
Areva plans to create a new group later this year - currently referred to as "New Areva" - that will bring together all its fuel cycle operations: mining, chemistry, enrichment, recycling, dismantling, logistics and related engineering.
The company announced last month that it plans to launch a €5 billion capital increase by the first quarter of 2017. It noted, "The French state has indicated its intention of subscribing to it and ensuring its complete success, in compliance with European regulations."
Yesterday the company said that it had agreed a €1.1 billion bridging loan with six lending banks in order to secure the company's liquidity in 2016.
Knoche said, "Concerning the group's liquidity, 2016 is funded and the capital increase which will be launched in the coming months will enable us to gradually regain the group's positive profile. A new phase awaits us in 2016, one we can enter with clarity and confidence in the implementation of the restructuring announced in 2015 and in particular the autonomy of Areva NP and the creation of New Areva."
Researched and written
by World Nuclear News