* Shares down 20 pct in worst fall since company formed
* Posts H1 loss of 694 mln loss vs break-even year ago
* Exits concentrated thermal solar power business
* Cuts targets as utilities struggle
(Adds worst one-day loss since merger, analyst comment)
By Geert De Clercq
PARIS, Aug 1 Shares in French nuclear power
group Areva closed 20 percent lower on Friday, the
worst fall since the company was formed in 2001, as it posted a
first-half loss, exited a thermal solar power business and cut
The shares were down by as much as 23 percent earlier in the
session with trading the busiest by volume since late February,
when Areva posted a net loss of nearly half a billion euros.
Chief Executive Luc Oursel dropped a long-held target to
sell 10 nuclear reactors by 2016, saying it would "take a few
more years" and the firm warned that 2014 revenue would fall 10
percent, more than the 2-5 percent decline forecast in February.
Areva, which has not sold a new nuclear reactor since 2007,
hopes French utility EDF will get the green light from
European Union competition authorities this year to build two
Areva reactors in Britain, but its reactor sales are suffering
badly from the aftermath of the 2011 Fukushima disaster.
Billions of cost overruns and multi-year delays in four
projects involving its flagship EPR reactor have also hit the
state-owned firm's image, while Russian, Korean and American
reactor builders are winning orders at its expense.
An attempt to diversify into renewable energy has led to
more losses and the firm said on Friday it would close its
concentrated solar power (CSP) business, which generated about
100 million euros ($134 million) in revenue per year but made
tens of millions of losses.
About 100 jobs will be cut in the United States and India, a
company spokesman said. CSP used mirrors to concentrate sunlight
and produce steam.
Areva wrote down 373 million euros on the discontinued solar
business. The firm booked a 305 million euro operating loss,
reversing income of 290 million, and swung into a 694 million
euro first-half loss after breaking even in first-half 2013.
Revenue fell 12.4 percent to 3.89 billion euros and earnings
before interest, tax, depreciation and amortisation (EBITDA)
more than halved to 226 million euros from 487 million.
Oursel said the nuclear market environment had further
deteriorated as construction projects for new reactors abroad as
well as reactor overhaul operations in France had been delayed.
As a supplier to the utilities industry - which is suffering
from overcapacity and slack power demand - Areva is feeling the
impact of its customers' efforts to cut costs and is trying to
make savings itself to restore profitability.
The firm hiked its cost cut target to 1.2 billion euros from
1 billion and said it would cut 1,500 jobs in Germany by the end
of 2015, as well as 200 jobs in the United States this year. It
had earlier warned of 1,200 to 1,500 job losses in Germany.
Areva, which is 87 percent state-owned, also cut its
forecast for free operating cash flow before tax to "close to
breakeven" in 2014 and 2015, and "distinctly positive" in 2016.
In the first half, it stood at 71 million euros, versus a cash
burn of 158 million in the first half of 2013.
In February, the firm forecast positive pretax free cash
flow for 2014 and a "significant increase" in positive free
operating cash flow before tax for 2015-16.
The firm maintained its forecast for organic revenue growth
of around 4 to 5 percent per year in 2015-16 and set a target
for an EBITDA to revenue ratio of 14-15 percent in 2016.
"Management maintains its 2015-16 targets ... although these
appear challenging to us," Societe Generale equities analyst
Alok Katre said in a note.
(1 US dollar = 0.7470 euros)
(Editing by Mark Potter and Greg Mahlich)