home Equities Nuclear group Orano earnings slide in grim uranium market

Nuclear group Orano earnings slide in grim uranium market

PARIS, March 29 (Reuters) – French uranium mining and nuclear fuel group Orano, formerly called Areva, said its 2017 revenue fell 11 percent to 3.9 billion euros ($4.80 billion) and core earnings fell 30 percent to 946 million euros as demand for nuclear fuel remains low.

Orano’s order book, while still representing nearly eight years of revenue, fell to 30.8 billion euros at the end of 2017 from 33.6 billion euros at the end of 2016 and the company expects revenue will fall again this year.

The company continued to burn cash, with a negative cash flow of 1.06 billion euros compared to minus 915 million euros in 2016, but Orano said it targets positive net cash flow from company operations this year.

Net losses widened to 252 million euros from 239 million euros in 2016 and chief executive Philippe Knoche said the company could not give any guidance on net earnings because of the volatility of the uranium market and foreign currency swings.

Knoche said Orano remained in talks with China for the sale of a nuclear fuel processing plant and hopes to sign a contract by the end of this year.

The nuclear fuel market has been in the doldrums since the 2011 Fukushima nuclear disaster and although a few Japanese plants have finally restarted this year, demand for this type of fuel from utilities worldwide remains depressed. The uranium price is just above decade lows, at around $21 per pound.

Orano was delisted from the stock exchange following a restructuring and government-led recapitalisation last year.

Source: Reuters