A £2.3 billion loss in a "landmark year"

3 August 2002

BNFL has reported a pre-tax profit of £22 million from operations before exceptional items for fiscal year 2002, compared with a £210 million loss for fiscal 2001. Its pre-tax loss after exceptional items came to £2328 million.

The pre-tax £2350 million exceptional charges comprise of four elements:

• A £1935 million provision increase arising from the revision of lifetime costs relating to the strategy for dealing with historic waste management at Sellafield.

• A £70 million provision in relation to additional costs incurred in the US Environmental Services business, due to the interruption to operations at the East Tennessee Technology Park as a result of the events of 11 September, 2001, coupled with changes in the regulatory environment.

• A £30 million realised gain on the Nuclear Liabilities Investment Portfolio was classified as exceptional.

• A £375 million charge relating to impairment in the carrying value of fixed assets, coupled with accelerated decommissioning charges, arising from the revision to the Magnox reactor power station closure programme. This reflects the recently announced earlier shutdown of the Calder Hall and Chapelcross plants.

Calder Hall was originally due to start closing in 2006, but is now planned to shut down in March 2003; the Chapelcross reactors, originally due to start closing in 2008, will complete a progressive shutdown by no later than March 2005.

BNFL chairman Hugh Collum said: "This has been a landmark year for BNFL during which significant decisions have been made against a backdrop of substantial achievements. An improved operational performance helped turn last year's £210 million loss before tax and exceptional items into a £22 million profit this year. With nuclear power firmly on the energy agenda, the future looks increasingly bright for the industry and the company."

CEO Norman Askew commented: "There were two major policy decisions during the last financial year, which will positively impact on BNFL in the years to come. The first was the announcement by the UK government to establish the Liabilities Management Authority (LMA). The second was a change in company policy on the way historic wastes will be managed at the UK sites."

As a result of the exceptional items, the net worth of the group has fallen by £2096 million during the year, to a negative £1843 million. However, BNFL said its profitability is likely to improve as the losses of the Magnox Generation business group and liabilities costs are removed.

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