France’s state-controlled nuclear giant Areva has suspended trading in its shares and warned of a dramatic collapse in its profits. The suspension “is to ensure that comprehensive, accurate and precise information is communicated to the market and to all Areva’s shareholders in an equal manner,” a company statement said.

The suspension immediately preceded the announcement of plans (on Tuesday 13 December) to cut jobs and halt work on projects around the world as part of a five-year turnaround plan, aimed at getting back into profit after posting a huge financial loss in 2011.

Areva’s new chief executive Luc Oursel told a meeting of financial analysts that Areva plans to cut up to 1500 jobs in Germany and has suspended a controversial nuclear enrichment plant project in Idaho in the USA in a bid to offset losses this year that are likely to reach €1.6 billion ($2.12 billion).

M. Oursel said that the German job cuts were necessary following the German government’s decision to shut down eight nuclear reactors and progressively phase out the remaining nine reactors between 2015 and 2022. German projects had represented 6 % of Areva’s order book of € 44 billion. The French government will not allow mass layoffs in France, but Areva will stop hiring in support areas such as information technology. Areva employs 8000 people in support functions, including 6000 in France.

At the same time the company is suspending a number of projects around the world, including the Eagle Rock Enrichment Facility near Idaho Falls. In October Areva won a US licence to build and operate the planned $3 billion gas centrifuge uranium enrichment plant, a key step in the company’s plans to expand production of nuclear fuel in the United States.

According to the Financial Times Areva’s operating losses are largely the consequence of a ruinous bet on uranium prices with the 2007 acquisition of a small mining company. Areva paid €1.8bn for UraMin, a Canada-based company with assets in Namibia, the Central African Republic and South Africa, when uranium was trading at around $138 a pound. Today the commodity is trading at about $50 after demand slumped following the 11 March 11 Fukushima nuclear disaster.

Areva has in fact stated that deposits at UraMin’s mines were far smaller than expected. The company is taking a €1.46bn writedown on UraMin, on top of a €426m provision last year. The size of the charge is embarrassing for the French government, which sanctioned the purchase, and for Anne Lauvergeon, Areva’s long-serving former chief executive.

Areva said it would take a further €900m in charges related to its nuclear activities, including cost overruns on its delayed third-generation plant in Finland. The result would be operating losses this year between €1.4bn and €1.6bn, the first loss for the 10-year-old group. M. Oursel said he would cut yearly costs by at least €1bn by 2015 and sell at least €1.2bn of (as yet unidentified) assets by 2016 to restore profits and reduce debt. But he was, he said, confident about the industry’s future because of the world’s need to cut reliance on carbon-producing energy sources.

Greenpeace, a prominent anti-nuclear campaigner, reacted with the statement that these financial developments coupled with huge problems building the two Areva-designed EPR’s currently under construction is “the clearest indication yet that they are not fit to build reactors costing billions of pounds for the UK”.

Greenpeace energy campaigner Louise Hutchins said: “The [UK] government must now halt its rush towards a new generation of nuclear power stations. Now is not the time for the UK government to expose British households to the billions in overspend and years of delays that come with nuclear power”, a reference to French government-owned EDF’s ambition to build several EPR’s in Britain.

• Areva’s first EPR (European pressurised reactor) the Olkiluoto project in Finland, has been beset by major problems from the outset. Frequent delays, cost overruns and disputes with former project partner Siemens and with customer TVO, have seen the total cost of the still unfinished project rise to €5.8 bn Euros, representing a loss of €2.8 bn. The latest estimates are that the Finnish station will be delivered four years late.

• Only 10 days ago (3 December) an installation in the USA of Areva’s TELEPERM XS, a safety-related digital instrumentation and control reactor protection system, won the prestigious “Engineering Project of the Year” award at the 13th annual Platts Global Energy Awards held in New York City.