Areva terminated its concentrated solar power (CSP) activity
Areva terminated its concentrated solar power activity, which generated about 100 million euros ($134 million) in revenue per year. Ausra was founded in 2006 and raised at least $130 million from high-profile investor
French nuclear company Areva hasn’t sold a new nuclear reactor since 2007, and the company has been struggling heavily in the wake of the Fukushima nuclear disaster. Now via the firm’s earnings on Friday, Reuters reports that Areva says it plans to shut down its solar thermal division, which it acquired from venture capital-backed Valley startup Ausra back in 2010.
Ausra was founded in 2006 and raised at least $130 million from high-profile investors in Silicon Valley including Kleiner Perkins, Khosla Ventures, and Al Gore’s Generation Investment. The company developed solar thermal technology, which uses mirrors and lenses to focus sunlight onto liquid-filled tubes, heating up the liquid and powering steam turbines. In contrast, solar panels convert sunlight directly into electricity.
Areva terminated its concentrated solar power activity, which generated about 100 million euros ($134 million) in revenue per year but made tens of millions of losses. About 100 jobs will be cut in the United States and in India, a company spokesman said on Friday.
The French company said provisions were made for negative results at completion of wind and solar contracts, provisions for contingencies and provisions for impairments going forward.
Project-specific details were not supplied. Areva is in the process of spinning off its offshore wind business to a joint venture with Gamesa.
“The group continues to restructure its operations in renewable energies by entering into partnerships in promising markets, such as offshore wind and energy storage, and by discontinuing loss-making operations, such as concentrated solar power,” it said.
Shares of French nuclear group Areva dropped 12 percent after the firm posted a first-half loss and cut its earnings targets as its struggling utilities customers reduced costs and the nuclear sector remains in the doldrums.
A company spokesman told reporters that as a supplier to the utilities industry – which is suffering from overcapacity and slack power demand – Areva is feeling the impact of its customers’ efforts to cut costs.
The firm made a 694 million euro first-half loss after just breaking even in the same period in 2013. The firm booked a 305 million euro operating loss, reversing income of 290 million, and wrote down 373 million on discontinued operations.
Revenue fell 12.4 percent to 3.89 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) more than halved to 226 million euros from 487 million.
For 2014, Areva expects revenue will fall 10 percent. At the publication of 2013 earnings in February, it had forecast a 2 to 5 percent drop.
Areva, which is 87 percent state-owned, also cut its forecast for free operating cash flow before tax to "close to breakeven" in 2014 and 2015, and "distinctly positive" in 2016. In the first half, it stood at 71 million euros, versus a cash burn of 158 million in the first half of 2013.
In February, the firm forecast positive pretax free cash flow for 2014 and a "significant increase" in positive free operating cash flow before tax for 2015-16.