* Recurring operating profit down 70 pct, orders cancelled
* Areva says impact of Fukushima still very hard to assess
* Reactor shutdowns in Japan, Germany hit Areva’s fuel sales
* CEO remains confident on longer-term market fundamentals
By Marie Maitre
PARIS, July 27 (Reuters) – Areva reported lower first-half profits and a falling order backlog after the Fukushima nuclear disaster led some power suppliers to cancel their orders with the French state-controlled reactor builder.
Areva’s new Chief Executive Luc Oursel, who replaced long-term head Anne Lauvergeon in June, said the impact of the Japanese catastrophe on its nuclear business was still “extremely difficult” to assess.
Areva, which scuttled its financial goals in May, will unveil a strategic plan at year-end and the group remains confident in the long-term outlook for the nuclear industry, Oursel said in his first statement as chief executive.
“The fundamentals underpinning the development of the nuclear market are unchanged: strong growth in demand for electricity in the coming decades, diminished fossil resources, the search by many countries for energy independence and the growing need to address climate changes,” Oursel said.
Areva, whose activities range from uranium mining to nuclear reactors and waste recycling, said recurring operating profit plunged to 62 million euros ($90.06 million) in the first half of the year from 213 million euros in the first half of 2010.
This figure, which excluded one-off items, included 87 million euros for provisions and impairment of assets recorded in the reactors and services business, which Areva said related to the short-term business volume drop following Fukushima.
Operating income, including one-off items, was boosted by Siemens’ (SIEGn.DE) payment of 648 million euros of penalties after a Paris arbitration court ruled the German group had violated a shareholder pact with Areva by forging an alliance with Russian group Rosatom.
Recurring operating profit was 710 million euros against an operating loss of 485 million euros in the first half of 2010.
Areva’s order backlog stood at 43.1 billion euros at the end of June, compared with 44.1 billion at the same time in 2010 and sales fell 3.9 percent year-on-year to 4.997 billion euros.
Oursel said orders worth 191 million euros of uranium fuel had been cancelled by Japanese and German clients in the wake of Fukushima.
Japanese utilities are now operating only 17 out of the 54 reactors available before the March 11 earthquake and tsunami, while Germany permanently suspended eight of its 17 reactors as part of plans for a complete nuclear power phaseout by 2022.
Against this background, Areva said it was still reviewing the value of its assets following the Fukushima disaster and said impairment tests would be carried out by Dec. 31.
Areva had indicated it would give a new guidance at the end of June but Lauvergeon’s abrupt replacement disrupted the group. The lack of guidance five months after Fukushima has had analysts gritting their teeth, contributing to a 30-percent share fall since Jan. 1.
Shares closed down 1.7 percent at 24.80 euros on Wednesday.
Areva had previously forecast significant growth in its order backlog in 2011 as well as rising revenue and an operating margin above 5 percent. It had also predicted revenues of 12 billion euros, a double-digit operating margin and significantly positive free operating cash flow in 2012.
(Editing by Elaine Hardcastle)