March 1, 2017 / 6:57 AM / in 10 months

French group Areva's 2016 loss narrows, received no claims over Creusot foundry

PARIS (Reuters) - French state-controlled nuclear group Areva said on Wednesday its 2016 full-year net loss had narrowed and that it had received no claims from customers following manufacturing irregularities at its Creusot Forges foundry.

Areva, which is being restructured and recapitalized after years of losses wiped out its equity, booked a 2016 net loss of 665 million euros ($702 million), after losing 2.04 billion euros in 2015 and 4.83 billion euros in 2014.

The company booked 121 million euros in charges related to manufacturing irregularities and document falsifications at its Creusot Forge foundry, mainly due to the cost of an audit and the cost of re-manufacturing or scrapping components.

Two reactors of French utility EDF have been halted and utilities and regulators in countries including the U.S, Britain and China are investigating Creusot-made heavy nuclear components after Areva discovered in 2016 that shortcuts in manufacturing had been covered up in tracking documents.

“For now we have had no claims from any clients. We are in talks with the clients and regulators concerned,” chief financial officer Stephane Lhopiteau told reporters on a call.

The company is in the process of reviewing some 6,000 manufacturing tracking documents by the end of this year.

Areva, which has split off its uranium mining and nuclear fuel unit NewCo and will sell its reactor unit Areva NP to utility EDF this year, presented separate pro-forma accounts for the parts of the group over which it will lose majority control.

Areva’s NewCo unit saw revenue slide to 4.01 billion euros from 4.17 billion in 2015, but thanks to cost-cutting the unit swung into a 440 million euro operating profit, reversing a 100 million euro loss.

“The markets for uranium, conversion and enrichment remain depressed,” cautioned Lhopiteau.

Areva also booked a 316 million euro write down on its uranium mines and booked a further loss of 116 million euros on the Olkiluoto 3 reactor under construction in Finland. Cumulative losses on it now stand at 5.6 billion euros.

Lower interest rates also led to 246 million euros worth of provisions for decommissioning its nuclear facilities.

Areva’s cash burn widened to 621 million euros from 590 million in 2015 but was at the lower end of its guidance.

Lhopiteau said Areva’s planned 5 billion two-stage capital increase - of which 4.5 billion euros will come from the state and 500 million from Japan’s Mitsubishi Heavy Industries and JNFL - was scheduled for June.

He also said he expected that the sale of reactor unit Areva NP to EDF would happen in the fourth quarter of this year.

Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below