Nuclear agency losses top £1bn

NUCLEAR agency BNFL unveiled annual losses of £1.09bn today after one-off costs during the year hit more than £800m.

The performance for the period to March 31 is an improvement on the record £2.32bn of a year earlier, though losses at an operating level widened to £190m from the £68m recorded in 2002.

Chairman Hugh Collum said the year had been 'demanding' but added progress had been made in laying the foundations for the State-owned company's future, which is likely to increasingly focus on the nuclear clean-up market in the UK.

It has welcomed recent Government plans to establish the Nuclear Decommissioning Authority (NDA), which will clear up the radioactive legacy left by 50 years of nuclear power and weapons development.

The proposed transfer of BNFL sites to the NDA will pave the way for a services company able to compete for contracts in the decommissioning process. The company presently operates in 16 countries and employs more than 23,000 people.

In today's annual results, BNFL maintained turnover at £2.2bn but saw operating losses increase, partly because planned maintenance work resulted in reduced output at BNFL's Thorp plant at Sellafield.

It was also affected by lower electricity prices and the employment of 1,000 extra staff to meet the requirements of a Nuclear Installations Inspectorate's report on control and supervision of operations at Sellafield.

Exceptional items totalling £827m included a £415m increase in the expected cost of decommissioning stations at Hinkley Point, Somerset, and Bradwell Magnox, Essex.

There was also a £230m accounting charge after a contract with financially troubled British Energy was renegotiated, leading to a review of the value of BNFL's nuclear fuel manufacturing plant at Springfields, near Preston.

Another £175m of provisions were taken against two nuclear clean-up contracts in the US taken on several years ago at fixed prices.

Despite the losses, the company added it had improved its cash management with a positive cash flow of £109m.