PARIS (Reuters) - The core operating profit of Areva’s reactor unit Areva NP is growing according to its recovery plan, Areva NP’s chief executive Bernard Fontana told French business daily Les Echos on Tuesday.
Under the recovery plan, Areva NP’s earnings before interest, tax, debt and depreciation (EBITDA) is seen reaching 207 million euros ($248 million) this year and more than 450 million euros in 2018. This compares with 95 million euros in 2016, Les Echos reported.
The reorganization of Areva, nearly entirely state-owned, involves the sale of Areva’s nuclear reactor business to power utility EDF (EDF.PA) by the end of this year. Its uranium mining, nuclear fuel production and decommissioning activities will be transferred to a new company, NewCo.
“(Areva NP) follows a path that complies with the one determined in the fall of 2015... Revenues are 10 percent lower than planned but we’re on time in terms of EBITDA and operational free cash flow,” Fontana said, citing cuts in rental costs at the company’s headquarters in Paris’ business district of La Defense.
Areva NP’s plan notably consists in increasing production in its plants of Paimboeuf, Jarrie, Jeumont and Saint-Marcel and internalizing activities that were previously subcontracted, Les Echos reported.
“The equipments we supply will have to be produced at a higher rate and quality,” Fontana said, as Areva NP’s foundry Creusot Forge undergoes an audit.
Fontana added that the company’s priority in the next months is to make work the next generation EPR reactors that are under construction.
Those include EPR reactors in Taishan in China, Olkiluoto in Finland and Flamanville in France.
French utility EDF should eventually take 75.5 percent of Areva NP, along with Japan’s Mitsubishi Heavy Industries (7011.T) (up to 19.5 percent) and Assystem (ASY.PA) (5 percent), Les Echos reported. India’s Reliance Industries (RELI.NS) could also buy a stake, the daily added.
Reporting by Benjamin Mallet; Writing by Mathieu Rosemain; editing by John Irish