Areva sticks with plan to build 10 nuclear reactors by 2016

PARIS Thu Feb 28, 2013 3:04pm EST

PARIS (Reuters) - French nuclear group Areva's (AREVA.PA) still expects to sell 10 nuclear reactors by 2016, despite a string of disappointments in the past months, its chief executive officer said on Thursday.

Areva's flagship 1600 megawatt European Pressurised Reactor (EPR) has been excluded from tenders in Finland and Czech Republic, and two EPRs under construction in Finland and France are years behind schedule and billions over budget, raising questions about Areva's target to sell 10 EPRS by 2016.

"We face very vigorous competition, in particular from our Russian and Japanese friends," Chief Executive Officer Luc Oursel said at the company's 2012 earnings news conference.

"We do not pretend we will win every tender, but I remain convinced it is possible to maintain this objective," he added.

Charges related to the delays to the EPR it is building on Olkiluoto island in Finland partly prevented Areva from returning to profit in 2012.

The company's attributable loss narrowed to 99 million euros ($129.43 million) from a 2.5 billion loss in 2011.

Restated earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubled to 1.01 billion euros from 421 million euros. For this year, the firm expects EBITDA of more than 1.1 billion euros, it said on Thursday.

Oursel said he hoped that talks with French power group EDF (EDF.PA) and Chinese utility CGNPC about a new 1000 megawatt reactor model would reach a conclusion by the end of the first half.

He said the plan is not to develop an entirely new 1000 MW reactor, but to look at how a new reactor type could converge with Areva's 1000 MW Atmea reactor, a model which has not been sold or built yet.

"We will see in the next weeks and months whether we can agree on the specifications," Oursel said.

He also said the mid-size Atmea reactor was in the running for possible future reactor sales to Jordan, Vietnam, Argentina and Turkey.

Oursel said Areva was hoping for contracts for the EPR in Britain, China and India. At a later stage, the company is also hoping to sell EPRs in Saudi Arabia, Poland and South Africa.

Asked whether Areva was interested in buying a stake in uranium enrichment firm Urenco, Oursel seemed to indicate that Areva's priority now was to restore its finances, not to embark on a major acquisition.

"Urenco is a marvelous company. It is a competitor and a partner for us. But for the moment, the priority of the group is to restore its finances," he said, adding that the company is not planning any major strategic moves at the moment.

Areva will not pay a dividend on 2012 earnings after not paying one on 2011 earnings. But it said that a dividend on 2013 earnings would amount to a maximum 25 percent of net attributable income.

(Reporting by Geert De Clercq and Benjamin Mallet; editing by Carol Bishopric)