Hitachi suspends UK NPP construction

21 January 2019

As expected, Hitachi announced on 17 January that it has decided to suspend its new nuclear power stations project in the UK that Horizon Nuclear Power, a subsidiary of Hitachi and a power generation development company in the UK, has been undertaking at Wylfa Newydd on Anglesey island in north-west Wales. The decision was made “from the viewpoint of Hitachi’s economic rationality as a private enterprise.”

Accordingly, Hitachi plans to post an impairment loss and other expenses on consolidated financial results for fiscal 2018, the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019). It also plans to post an extraordinary loss on unconsolidated financial results for fiscal 2018, the year ending March 31, 2019. Based on these points, Hitachi has revised its full-year consolidated business forecast for fiscal 2018, the year ending March 31, 2019.

Hitachi plans to post an impairment loss and related expenses of approximately 300.0 billion yen as other expenses on consolidated financial results for fiscal 2018, the year ending March 31, 2019. It also plans to post losses of approximately 300.0 billion yen associated with the suspension of the nuclear power plant construction project in the UK as extraordinary losses on unconsolidated financial results for fiscal 2018. These amounts are current estimates,

Hitachi has held detailed discussions with the UK government over various options about how the UK government might support the project including potential for equity and debt investments. The parties, with the co-operation of the Japanese government, have held discussions about the financial structure for the project and various conditions for the building and operation of the nuclear power station.

Since the acquisition of Horizon, Hitachi has set the following three points as the main criteria for business continuation and reviewed the Horizon Project from the viewpoint of its economic rationality: ie securing reasonable returns as a private enterprise, realising a financial structure on the premise of making Horizon Project off balance sheet, and limiting its investment to an acceptable range as a private enterprise.

Unfortunately, despite the best efforts of everyone involved the parties have not been able to reach an agreement to the satisfaction of all concerned. As a result, Hitachi has decided to suspend the project at this time from the viewpoint of its economic rationality as a private enterprise, as it is now clear that further time is needed to develop a financial structure for the Horizon Project and the conditions for building and operating the nuclear power stations.



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