Areva's order book reaches record level in 2007
04 February 2008
France's Areva group reported that at the end of 2007, it had orders worth some €39.834 billion ($58.9 billion), up 55% from the level of orders at the end of 2006. For 2007, the Areva group reported total sales revenue of €11.923 billion ($17.7 billion), an increase of 9.8% compared with 2006.
Most of the group's orders are for nuclear equipment and services provided by its Nuclear division, representing some €34.927 billion ($51.7 billion). This was a 58% increase compared with such orders at the end of 2006, primarily attributable to a series of deals with Chinese utility China Guangdong Nuclear Power Corporation (CGNPC). The series of agreements provide among other things for the construction of two Evolutionary Pressurized Water Reactor (EPR) nuclear islands and the supply of all the materials and services needed for their operation through to 2027. The EPRs will be sited at Taishan, 100 km southwest of Guangzhou and 150 km west of Hong Kong in Guangdong province. CGNPC also bought 35% of the production of UraMin, a mining company acquired by Areva in August 2007. In addition, Areva signed several significant long-term contracts, in particular with Korea Hydro & Nuclear Power (KHNP) of South Korea, Electricité de France (EdF) and Japanese utilities.
Sales revenue for Areva's Nuclear division increased 6.4% in 2007 to €7.595 billion ($11.3 billion). The group's Front End division reported a 7.6% increase in sales in 2007 to €3.140 billion ($4.7 billion), with the division's enrichment business unit reporting "strong growth". Sales revenue from Areva's Reactors and Services division were up 17.5% in 2007, mainly due to a recovery in the reactor services business. This recovery was as a result of "progress" on construction of the Olkiluoto 3 EPR in Finland and the start of construction of EdF's Flamanville 3 EPR. The group's Back End division reported an 8.9% fall in sales revenue in 2007 to €1.738 billion ($2.6 billion) due to "staggered production" in the group's waste treatment operations.
Areva signed four major commercial nuclear fuel contracts in the USA in late December 2007. Under a contract with Tennessee Valley Authority (TVA), Areva will supply unit 1 of the utility's Browns Ferry nuclear power plant with reload batches of blended low enriched uranium (BLEU) fuel beginning in 2010. The BLEU project is a partnership between Areva, TVA, the US Department of Energy (DOE) and Nuclear Fuel Services. The project aims to process 33 tonnes of surplus weapons-grade high-enriched uranium (HEU) from the US Department of Energy into commercial nuclear fuel. Areva currently supplies nuclear fuel to units 2 and 3 of Browns Ferry and Sequoyah unit 2 as part of the BLEU project.
In addition, Areva has agreed to supply reload batches of fuel for Constellation's two-unit Calvert Cliffs nuclear power plant in Maryland. Meanwhile, PPL Susquehanna has extended its contract with Areva for the supply of reload batches for the Susquehanna nuclear power plant, with additional deliveries to begin in 2011. Also under a contract extension, Areva will supply fuel for unit 1 of AmerGen's Three Mile Island, with deliveries of reload batches commencing in 2009.
Areva's Transmission & Distribution division won several major contracts during 2007, increasing the value of total orders for the division at the end of 2007 by 34% to almost €5.816 billion ($8.6 billion). Sales revenue for the division grew 16.2% in 2007 to €4.327 billion ($6.4 billion).