Areva's €4.8bn write-off year: France's nuclear champion sold for parts

Areva was the spearhead of France's nuclear industry: state-owned to 87%, it mined uranium, made fuel, built reactors and recycled spent fuel as one integrated group. The model was sized for a nuclear renaissance that never came. It paid €1.8bn for the Canadian miner UraMin in 2007 and €1.25bn developing its Namibian deposits — then discovered the ore was far poorer than expected, burning about €3bn. Its fixed-price Olkiluoto 3 reactor, promised for 2009, slid to 2018, with penalties a Le Figaro estimate put at €4–4.5bn.

Fukushima in March 2011 froze new-build plans worldwide — and Areva had already lost the $20bn-plus Abu Dhabi tender to South Korea in 2009. It made a loss every year from 2011. In November 2014 it issued its third profit warning in four months, dropped its 2015–16 targets, and watched the shares open 23% lower; S&P cut the debt to speculative grade and analysts said the group needed a €1–2bn capital injection. Economy Minister Emmanuel Macron insisted 'Areva is here to stay.'

The reckoning came in February 2015: a provisional 2014 net loss of €4.9bn — larger than the group's €3.7bn stock-market value and about three-quarters of its equity — including new Olkiluoto provisions, the Comurhex II uranium plant write-down and end-of-cycle fuel obligations. The final figure, published on 4 March by the new Varin–Knoche leadership, was €4.8bn on revenue down 8% to €8.3bn, with €5.8bn of debt, €720m of extra Olkiluoto charges, and no free cash expected before 2018.

The state had no choice but surgery: a €1bn cost-cutting plan and up to €1bn of asset sales in March 2015 — the Canberra instruments unit already lined up — and a refusal to play 'architect-ensemblier' on solo turnkey projects. As one senior industry source told Reuters in 2014, each piece cut loose would be too small to compete; the group could no longer afford to stay whole either.

2014 net loss €4.8bn — larger than the group's €3.7bn market value; shares halved in 2014; S&P cut the debt to speculative grade

Fixed-price turnkey reactor contracts turned every delay into Areva's liability; Olkiluoto 3 alone was re-provisioned year after year, €720m more in the 2014 accounts.

The 2007 UraMin acquisition — €1.8bn plus €1.25bn of development — was written off when the Namibian ore proved far poorer than expected.

Fukushima froze the export market the integrated model was sized for; Abu Dhabi had already gone to Korea with a $20bn-plus order.

Capital projects like Comurhex II were financed against renaissance demand, so the 2014 cleanup hit deferred taxes, plants and contracts all at once.

A single-technology champion has no cycle to hide in. When its fixed-price projects and renaissance bets fail together, the write-off can dwarf the market cap.

The 2015 net loss came in at €2bn as restructuring itself cost money, and by February 2016 the government was negotiating extra months of delay on Areva's bank repayments; RTL reported the state rescue would be largely at taxpayers' expense, several billions of euros. EDF was set to become majority shareholder of the reactor business, ending a decade of infighting between the two state groups that had crystallised in the Lauvergeon–Proglio feud. The complete nuclear company ended the decade smaller, dismantled, and publicly owned.