Areva shares plunge after loss, problems in Finland

Tags: Companies
Shares in French nuclear power group Areva plunged by 10.21 percent in early trading today, after the company reported a net loss for the third year running.

The price of Areva shares was being quoted at 19.61 euros. Meanwhile the overall French market as measured by the CAC 40 index was up 0.10 percent.

In a results statement yesterday, Areva revealed that it had taken heavy charges for its deeply troubled contract to build a new-generation EPR nuclear reactor in Finland.

The group also warned that sales this year would suffer from persistent problems for the nuclear energy market.

Areva, a world leader in the nuclear power industry, also said that it would not pay a dividend this year. It last paid a dividend in respect of performance in 2009.

The company reported a net loss of 494 million euros (USD 675 million).

It said that result was worse than the 99-million-euro loss for 2012 because of 425 million euros it had to set aside last year to cover overruns and delays with the European Pressurised Reactor (EPR) it has been building in Olkiluoto, Finland for the past nine years.

Revenues last year also shrank by 4.0 percent to 9.2 billion euros, and its renewable energies activities took a hit because of lack of orders.

The results ran counter to Areva's forecast early last year that it would finish 2013 in the black.

Areva's EBITDA (earnings before interest, taxes, depreciation and amortisation) was 1.04 billion euros, close to its target of 1.1 billion euros.

The group, which is directly and indirectly owned 87 percent by the French state, said it continued to encounter challenges in the nuclear market, which is being treated with caution following the 2011 Fukushima catastrophe.

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