Areva Net Profit Falls

GREG KELLER

PARIS (AP) — French nuclear engineering giant Areva SA said Thursday its net profit fell slightly last year after delays and cost overruns at a major reactor project in Finland led to hundreds of millions of euros in new losses.

Paris-based Areva, the world's largest nuclear reactor builder, reported net profit of euro552 million ($754 million) for 2009, down from euro589 million in 2008.

Areva's earnings were hit by a euro550 million charge in the first half to cover additional construction delays on the 1,600-megawatt Olkiluoto 3 reactor it is building for Finnish power company TVO. The reactor, which had originally been scheduled to begin operations last year, has accumulated euro2.3 billion in losses.

The company now says the project's final cost and completion date remain uncertain.

Areva's core nuclear reactors and related services division lost a total of euro626 million last year, largely due to the troubled Finnish reactor project. Those losses were offset by strong earnings growth in the uranium mining business and stable results from Areva's waste recycling operations.

Areva is in the process of selling off its electric transmission and distribution business to a French consortium for about euro4 billion. It said that excluding this business, it earned euro270 million last year, up from euro127 million in 2008.

In a statement, Areva Chief Executive Anne Lauvergeon said the sale of the Areva T&D unit to Alstom SA and Schneider Electric would not affect the group's financial performance over the coming years. The company aims to increase its revenue by 12 percent a year to euro12 billion in 2012 and achieve a double-digit operating margin.

Last year, Areva made an operating margin of 7.6 percent, excluding the impact of the charge for delays in the Finnish reactor. Revenue grew 5.4 percent to euro8.5 billion.

This year, Areva targets "substantial" growth in revenue and orders, higher operating profit and a "strong increase" in net profit.