Areva have accumulated losses of €1.7 Bn. on constructing Olkiluoto 3 - Siemens want out ... European Pressurized Reactor in trouble
France's national nuclear company Areva has produced their FY 2008 results and revealed estimated accumulatedlosses of at least €1.7 Bn. on constructing Olkiluoto 3.
The 1600 MWe EPR reactor at Teollisuuden Voima Oyj's (TVO's) Olkiluoto site which was meant to begin operation this year is now expected to start in 2012. The joint Areva-Siemens contract was worth €3 billion when signed at the end of 2003.
In October Ava announced a 4th delay to the Finnish project — Europe's first pressurized nuclear reactor. The so-called European Pressurized Reactor is meant to eventually replace aging reactors whose designs date from decades ago - such as the one's planned for the UK by EDF.
Arbitration in the International Chamber of Commerce is underway between TVO and Areva . Proceedings are secret, but it is known that the Areva-Siemens consortium would like a schedule extension and €1 billion ($1.2 billion) in compensation and late payments, while TVO has said in letters that it considers itself entitled to a whopping €2.4 billion ($3.0 billion) in damages.
OL3 is the largest construction project in Finland and one of the largest worksites in Europe with over 4,500 site workers.
Areva also announced that Siemens wants out of their joint Areva NP reactor technology joint venture. By the end of January 2012 Areva must purchase Siemens' 34% stake, which it has valued at €2.05 billion ($2.61 billion) ahead of final negotiations. This sum was added to Areva's net debt which then jumped to €5.5 billion ($7.0 billion), although this is balanced by equity of €7.3 billion ($9.3 billion).
Apart from these problems with Siemens and TVO , Areva's business performed strongly, with its order book growing to €48.2 billion ($61.4 billion), up 21% on last year. Company CEO the beautiful Anne Lauvergeon said the group's performance in the current economic situation demonstrates "the robustness of the Areva business model." In the last year, Areva has hired almost 10,000 new staff.
Areva made a net profit last year of €589 million, down 20.7 % from €743 million in 2007, while sales rose 10.4 % to €13.2 billion.
Uranium prices slide
Uranium prices fell by 40 % last year and this hurt Areva's earnings resulting in drastically cutting, then suspending, uranium trading activities in the second half. The mine in in Canada, Niger and Kazakhstanand refine the product in France.
See article on Rand Uranium for overview of cuent world Uranium m arket and currentproblems.