Areva Hit By EUR 425 Million Losses On Olkiluoto-3 Project

Posted by NucNet on 28 February 2014 in NucNet

Nuclear vendor Areva’s 2013 losses on the Olkiluoto-3 nuclear new-build project in Finland were 425 million euros (EUR) (586 million US dollars), up from EUR 400 million in 2012, according to the company’s annual report.

In 2012 Areva also had to pay a EUR 300 million insurance indemnity due to delays and cost overruns at the EPR, which is being built for Finnish utility Teollisuuden Voima Oyj. That loss was not counterbalanced by revenue from the project in the second half of 2013 because of a change in accounting procedure, Areva said.

Areva estimates that the Olkiluoto-3 project was 86 percent finished as of the end of December 2013. It said 2014 work will be focused on “critical path activities” in finishing the reactor. Earlier this month, containment pressure and leak-tightness tests were completed.

In February 2013, TVO said the start of the regular electricity production at Olkiluoto-3 might be 2016.

Areva also said it incurred a loss of EUR 141 million on a modernisation project at a Scandinavian nuclear power station. Areva did not specify which station it was.

The company reported a net loss of EUR 494 million in 2013, compared to a loss of EUR 99 million in 2012.

Total revenue for the year was up EUR 353 million above 2012 to 9.2 billion. Areva’s EBITDA (earnings before interest, taxes, depreciation, and amortisation), was EUR 1.04 billion, close to its target of EUR 1.1 billion.

Areva said 2013 net income had also been “negatively impacted” by its renewables energies business, which had had an operating loss of EUR 39 million in 2013, compared to EUR 20 million in 2012.

For the first time since 2005, cash generated by the company’s operations allowed it to fully fund strategic capital expenditure essential to growth. Towards this end, the company “built on robust growth in nuclear operations, cut costs and was austere on capital spending”.