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Areva May Resume Dividend in 2013 as Turnaround Plan Takes Hold

Areva SA, the world’s largest provider of nuclear equipment and services, may resume paying a dividend next year as its turnaround plan outlined in December is on target, Chief Executive Officer Luc Oursel said.

“The strategic plan targets a very significant increase in earnings before interest taxes, depreciation and amortization, with the aim of resuming dividend payments,” Oursel said in a telephone interview today. “We’re in line with the 2016 strategic plan.” Areva has not paid a dividend for two years in a row.

Oursel pledged in December to sell at least 1.2 billion euros ($1.53 billion) of non-strategic assets by the end of 2013 and slash costs by 1 billion euros two years later. The meltdown of a nuclear facility in Japan last year in the wake of an earthquake has dented Areva’s profitability, as well as construction delays at an atomic facility in Finland, and a 2007 investment in African uranium mines that soured.

Areva completed the sale of its 26 percent stake in Eramet SA to the French sovereign wealth fund for 776 million euros today, taking the amount of assets sold since the start of the year to more than 1 billion euros. Oursel said the company is ahead of its disposal plan and that there is “no profit warning in preparation whatsoever.”

The executive said “nothing justifies” the recent drop of Areva’s shares, which have lost almost half their value this year alone. Areva isn’t subject to any financing constraints, and the turnaround plan doesn’t include a capital increase, he said. Only about 4 percent of Areva shares trade, while the French government and state-controlled entities own 89 percent, and the Kuwait Investment Authority holds 4.8 percent.

Fluctuating Stock

“As all markets are depressed because of the general financial situation, a stock like ours is showing bigger-than-normal fluctuations,” Oursel said.

Areva is targeting Ebitda of more than 750 million euros this year and more than 1.25 billion euros in 2013. Oursel is aiming for sales of nuclear fuel, equipment and services to rise 3 percent to 6 percent.

The order backlog of Areva, which also has a nascent renewable energy business, rose 3.7 percent at the end of March from a year earlier to 45.1 billion euros, while first-quarter sales rose 2.4 percent to 2.03 billion euros.

French President Francois Hollande, who took office this week, has pledged to shut the country’s oldest atomic plant by 2017 and cut reliance on nuclear power. France generates about 77 percent of its energy from nuclear power now.

“All statements reaffirm the importance of nuclear, and progressive changes,” Oursel said. “I feel a very strong backing for an industry in which France is a leader.”

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