Submission + - Areva, French Nuclear Giant, Warns of $5.6 Billion Loss (nytimes.com)
mdsolar writes: Areva, the French nuclear technology giant, warned on Monday that it was facing a loss of a magnitude that raises doubts about its ability to continue operations without an injection of state funds to restore its capital.
The state-controlled company expects a 2014 net loss of about 4.9 billion euros, or $5.6 billion, from a loss of €500 million a year earlier, it said in a preliminary statement. The loss is substantially larger than Areva’s market capitalization of about €3.7 billion, suggesting it may need new funds to continue operating. ...
In its statement, Areva cited a variety of reasons for its weak results, including asset write-downs; provisions against losses at its nuclear plant project on the Finnish island of Olkiluoto, which is far behind schedule and over budget; and unprofitable renewable energy contracts. It also cited the cost of complying with regulations governing the shuttering of plants and writing down deferred tax assets. ...
Construction of the Olkiluoto plant in Finland started in 2005; in those optimistic days, Areva had projected it would begin operating in 2009. Today, Areva and Siemens, with which it is building the plant, are battling in court with the Finnish utility TVO over financial responsibility for construction delays and cost overruns. Some analysts predict the plant will not begin operating before the end of this decade.
The state-controlled company expects a 2014 net loss of about 4.9 billion euros, or $5.6 billion, from a loss of €500 million a year earlier, it said in a preliminary statement. The loss is substantially larger than Areva’s market capitalization of about €3.7 billion, suggesting it may need new funds to continue operating.
In its statement, Areva cited a variety of reasons for its weak results, including asset write-downs; provisions against losses at its nuclear plant project on the Finnish island of Olkiluoto, which is far behind schedule and over budget; and unprofitable renewable energy contracts. It also cited the cost of complying with regulations governing the shuttering of plants and writing down deferred tax assets.
Construction of the Olkiluoto plant in Finland started in 2005; in those optimistic days, Areva had projected it would begin operating in 2009. Today, Areva and Siemens, with which it is building the plant, are battling in court with the Finnish utility TVO over financial responsibility for construction delays and cost overruns. Some analysts predict the plant will not begin operating before the end of this decade.
