Areva Halts Nuclear Projects to Reduce Debts

---

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- Europe's largest nuclear engineering firm, Areva S.A. (EPA:CEI) (Paris, France), will cancel planned expansions at a number of unspecified French nuclear plants as part of a major cost-cutting exercise to get the company out of financial difficulties.

The French company, which expects operating losses for this year to amount to around €1.6 billion ($2.1 billion), blamed the impact that the disaster at Japan's Fukushima Daiichi nuclear plant has had on nuclear build projects and its uranium mining operations.

As a consequence, Areva has unveiled its Action 2016 plan, which outlines a wide range of measures designed to cut costs, including selling-off assets, reducing capital investments and its workforce, particularly in Germany.

"The dynamics of our plan are rooted in our confidence in the future of nuclear and renewable energies," explained Luc Oursel, Areva CEO. "Considering the expected growth in electric consumption, Areva is convinced that the outlook for nuclear and renewable energy remains strong in coming years. The plan aims to strengthen our leadership in the nuclear market, make us emerge as a leading player in renewable energy and give us the resources to achieve these goals."

He admitted: "Several capital projects have been suspended because of market uncertainties".

Germany's decision to exit the nuclear power market earlier this year is already having an impact on Areva's business and the company plans to cut up to 1,500 jobs there in the coming years. Areva said that Germany accounts for 6% of its backlog business. In Japan, Areva noted that 45 reactors have been halted since the March disaster while two new-build projects have been scrapped. It remains confident that nuclear power's role there will be confirmed in the near future. At the moment, Japan represents 13% of Areva's backlog business.

Areva has also set aside another €150 million ($195 million) for the hugely expensive and troubled EPR nuclear build at Olkiluoto in Finland.

In France, nuclear power could be facing an uncertain future if opposition parties gain power in the 2012 election. Just last week, both of the country's main opposition parties formed an alliance that will see them shutting down 24 of the country's oldest reactors by 2025 if they win next year's presidential election. For additional information see December 12, 2011, article - EDF to Overhaul Safety Systems at 20 Nuclear Reactors.

View Project Report - 79900041

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.