Update on income outlook
GROUP/FACTS AND FIGURES
June 23, 2010
Following the Supervisory Board meeting held today, AREVA provides the following update on its income outlook for 2010:
The group’s backlog at June 30, 2010 is expected to reach more than 43 billion euros, largely due to buoyant installed base business, and has risen by 1 billion euros year-on-year and by 500 million euros since December 31, 2009.
An operating loss may be expected for the first half of 2010 due to an additional provision of approximately 400 million euros on the OL3 construction project in Finland. Construction is well advanced, with installation of the reactor vessel and ramp-up of piping work, but the contract requires regular readjustment of the outlook at completion. This additional provision corresponds to the new schedule submitted by the AREVA-Siemens consortium to its customer, TVO, as announced on June 7th, which provides for the start up of the nuclear operation of the OL3 reactor at the end of 2012.
Meanwhile, negotiations with EDF on conditions for the shutdown of the Georges Besse1 enrichment plant are still ongoing.
Excluding the additional provision on OL3 and possible impact of shutdown conditions for the Georges Besse1 plant, the group’s operating margin1 for the first half of 2010 should be around 4%.
Net Income attributable to equity owners of the parent for the first six months of the year will include the 1.3 billion euro gain from the disposal of the Transmission & Distribution business and will be sharply up compared with the first half of 2009.
For the full year of 2010, the group confirms that it expects significant growth in backlog and revenue. The operating income should also grow, before provision, dilution capital gains2 and possible impact of shutdown conditions for the Georges Besse1. In addition, net income attributable to equity owners of the parent will be up sharply compared with the full year of 2009, in particular due to the gain on the disposal of T&D.
The AREVA group’s results for the first half of 2010 will be communicated on July 30, 2010.
1 Ratio of operating income to revenue
2 Capital gains from the sale of minority interests in capital gains from the sale of minority interests in mining and enrichment assets