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TheStreet Open House

Areva Net Profit Soars Despite New EPR Charge

GREG KELLER

PARIS (AP) ⿿ France's state-owned nuclear reactor builder Areva SA said Friday its net profit soared in the first half after it booked a ⿬1.3 billion (US$1.7 billion) gain selling its electric transmission and distribution division to French engineering firms Alstom SA and Schneider Electric SA.

Areva posted net profit of ⿬843 million for the six months ended June, up from ⿬161 million a year earlier, the company said in a statement Friday.

Areva, which also mines uranium and produces nuclear fuel in addition to designing and building reactors and recycling nuclear waste, also booked hundreds of millions of euros in new charges for delays in building the first of its new EPR reactors for a power utility in Finland, which is years overdue and ⿬2.6 billion in the red.

These new provisions and others, including a ⿬300 million writedown of of the value of some mining assets, caused Areva's operating loss for the period to widen to ⿬485 million from ⿬170 million a year earlier, while revenue rose 2.7 percent to ⿬44.1 billion.

TVO, the Finnish utilty that has ordered the reactor, said last month that the Areva-Siemens consortium responsible for its construction has informed it that "most of the work will be completed in 2012" and that the plant could begin to produce electricity the following year. Areva had orignally planned to deliver the reactor by 2009.

Monday's announcement means the fifth delay at the site in Olkiluoto, which has been plagued by faulty materials and planning problems since construction began in 2005.

The 1,600-megawatt plant was to be the continent's first European Pressurized Reactor, which are planned to eventually replace aging reactors worldwide.

Earlier this week the French government said it would sell up to a 15 percent stake in Areva by the end of the year, with some of the shares possibly taken up by France's state-controlled nuclear energy utility Electricite de France SA. EdF operates France's 58 nuclear reactors and the French government is keen to give it a leading role in the planned shakeup of France's nuclear energy industry, which was given a black eye last year after it lost a $20 billion contract to build reactors in the United Arab Emirates. That contract was won by a South Korean firm, and the French government blamed disunity among France's leading energy companies for the loss.

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