CASH CRISIS RAISES FEARS OVER £10BN NUKE PLANT
THE company building a new nuclear power station in Cumbria says partner Toshiba “remains committed” to the project despite the Japanese giant revealing huge financial losses.
NuGen said the £10billion plant is at the core of plans to provide safe, lowcarbon electricity for future generations.
Uncertainty has shrouded Moorside, near Sellafield, amid speculation that Toshiba would withdraw from all nuclear operations outside Japan.
Business and political leaders warned it would be a disaster if the corporation withdrew its planned investment.
Lib Dem leader Tim Farron, MP for Westmorland and Lonsdale, said it would be a “hammer blow” for the region.
Chairman Shigenori Shiga yesterday announced he was stepping down after Toshiba, which has a 60 per cent stake in NuGen, said it was on track to announce losses of £2.7billion in March.
The corporation said: “Toshiba will consider participating in the project without taking on any risk from carrying out actual construction work.
“As planned from the beginning, Toshiba will seek to sell the shares to interested parties.” NuGen CEO Tom Samson said: “The project has made significant progress since Toshiba took over as major shareholder in 2014.”
NuGen said it will continue with plans to develop Moorside, which will be capable of generating up to seven per cent of the UK’s electricity. Business and Energy Secretary Greg Clark said: “The UK Government is committed to new nuclear as an important part of our energy mix.”
ROLLS-ROYCE is set to step up an efficiency drive after a weaker pound and a corruption scandal sent it nosediving to a record £4.6 billion annual loss.
The maker of engines for Airbus and Boeing, which has already slashed its dividend to bolster its finances after a string of profit warnings, took a £4.4billion hit from writing off currency contracts designed to protect it against a fall in the dollar. Most aircraft deals are priced in the US currency.
It has also agreed to pay £671million to settle bribery and corruption investigations in the UK, America and Brazil. Underlying pre-tax profit fell 49 per cent to £813million on 2 per cent lower revenue of £13.8 billion at constant exchange rates as its marine business suffered weak demand from energy customers after oil prices slumped. Rolls maintained its final dividend payout.
Warren East, right, the former boss of chip designer Arm Holdings brought in two years ago to revive Rolls’s fortunes, said it had performed ahead of expectations. But shares fell 29½p to 710½p as he flagged “modest performance improvements” for 2017.
Demand for its large civil aerospace products and services had been “robust”, he argued, but demand for new corporate jets and the aftermarket for regional jets powered by its AE3007 engines had softened.
East is overseeing a streamlining of the business, including cutting hundreds of management roles, to deliver £200 million of annual cost savings.
He said: “While we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements.
“It is now time to look further ahead. Over the next few months we will conclude our review of our strengths and investment opportunities and set out an appropriate vision for the business and the best way we can deliver sustainable shareholder value.”
Edison Investment Research analyst, Andy Chambers, said: “This is starting to feel a lot better than the depressing commentaries that surrounded the stock a year ago. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, cash flow is likely to improve further particularly if supported by a recovery in marine and other activities.”