Areva results show investment and growth
23 March 2007
France's state-owned nuclear power giant Areva reported growth in 2006 along with heavy investment in front-end nuclear fuel and generous provisions for the delays to the Olkiluoto 3 project.
"The significant provision taken on the Olkiluoto 3 project was largely offset by the excellent performance of the other businesses," said Anne Lauvergeon, chair of the executive board.
In 2006 Areva made net income of Eur649 million ($862 million). The company has a backlog of contracted work to carry out amounting to Eur25,625 million ($34,100 million), about two-and-a-half years' work at revenue rates of Eur10,863 ($14,455 million) per year, which grew by 7.3% during the year.
The company made heavy investments in front end nuclear fuel services, particularly the 50% purchase of ETC the 'ultracentrifugation' uranium enrichment technology company; and the start of work on the George-Besse II enrichment plant that will employ the technology. In addition, money was spent to develop new uranium mines in Canada and Kazakhstan.
A grand capital expenditure sum of Eur1248 million ($1660 million) led the company to record a cash outflow of Eur358 million ($476 million), compared to an inflow of Eur783 million ($1042 million) in 2005.
Areva's Front End division recorded operating income of Eur456 million ($607 million) compared to Eur374 million ($498 million) last year.
The Reactors and Services divison reported a 16% increase in backlog to Eur4,413 million ($5872 million) but was the only divison with negative operating income, a loss of Eur420 million ($559 million). This can be attributed to increased costs associated with the construction of Olkiluoto 3, the first example of Areva's EPR pressurized water reactor to be built.
The reactor design is undergoing licensing in the USA which incurred further expense, but global interest in the power unit led to investment in the Chalon Saint Marcel plant, which manufactures large components like such as reactor pressure vessels and steam generators, and the purchase of heavy steel maker Sfarsteel.
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