August 3, 2011
AECL posts 'final'
loss
by Terry Myers
It seems almost academic now, but Atomic Energy of Canada Ltd has
reported a $60 million loss for the final year in its current form.
The company's 2011 financial statement for the year ending March 31 was
posted on the AECL website last week.
The statements show that AECL had commercial revenues last year of $508
million, and received more than $1.1 billion in government funding.
The company's commercial operations recorded a net profit of $213
million after government support, while its research and technology
side had a small loss of $10 million.
The company also took a $263 million loss on its “liability management
unit” - the program that looks after long-term waste management and
decommissioning.
The 2011 report will be the last for the “old” AECL. The federal
government announced earlier this summer it has sold the commercial
reactor side of the company to Canadian engineering giant SNC Lavalin.
Barring any final obstacles, the deal is expected to close this fall.
Not surprisingly, in his message, AECL president and CEO Hugh
MacDiarmid noted that 2011 was a year of change for the company.
“It is well understood by biologists that species must adapt in order
to survive. It is no different for corporations such as AECL,” he said.
“We too must change to meet the demands of the times, not only to
survive but also to thrive in the long term.”
MacDiarmid noted that during the past year, AECL “migrated” to a new
structure of two “sister” entities - “Commercial Operations” and
“Nuclear Laboratories.”
“For each entity, we took steps to improve business processes and
organizational capabilities, to preserve critical human resources, and
to ensure a smooth transition during the restructuring period.”
MacDiarmid said that heading into the future, AECL continues to face
“significant challenges,” including the need for “ongoing investment”
in the NRU reactor at Chalk River.
“In advance of restructuring, a strategic review of the long-term value
proposition and alternative management models for the Nuclear
Laboratories was underway.
“Efforts were also being made to implement rigorous project management
systems and processes to control costs and improve adherence to
schedules,” he said.
Despite the challenges, “our view of the future is an optimistic one,”
MacDiarmid said.
“We believe that a post-Fukushima world will work to improve, not
abandon, nuclear as a viable option to meet increasing global
electricity demand and that Candu will have a significant role to play
in shaping the nuclear industry.
“We will survive and we will flourish in the future: with the Nuclear
Laboratories as a valued partner in innovation for Canada's nuclear
industry, and our Commercial Operations as a successful vendor of
nuclear power plants around the world.”
In her report, AECL chair Glenna Carr noted that the company's board of
directors “reviewed the transitions needed” to prepare for the sale of
the commercial business.
“Extraordinary efforts were taken - and are ongoing - to ensure the
current operations are effective and support strategies to make the
Candu nuclear industry and medical isotope production resilient and
responsive in the future.”
Carr also noted the appointment last fall of Dr. Robert Walker as the
new head of the research and technology side.
“The appointment during the year of a new leader for the Nuclear
Laboratories has brought additional confidence that this transition
will be made as effectively as possible and that the post-restructuring
Nuclear Laboratories will bring continued value to the government of
Canada and Canadians.”
Government funding for AECL last year included:
- $408 million towards the company's “life extension” projects at Bruce
and Point Lepreau
- $144 million for research and development, “mainly supporting ongoing
Chalk River site operations”
- $124 million to address “regulatory, health, safety and environmental
needs,” including the “Project New Lease” infrastructure program and
“Isotope Supply Reliability Program” at Chalk River
- $126 million for decommissioning and waste management
- $40 million towards “product development” of the Enhanced Candu (EC6)
and Advanced Candu (ACR) reactors
- $205 million in “deferred development funding” for the ACR, which was
matched by a $205 million write-off due to “uncertainty in realizing
cash flows” from the new reactor design
- $34 million for the Dedicated Isotope Facilities, including the Maple
reactors, “to meet contractual obligations and defend contractual
rights”
- and $42 million to support the NRU repairs and return to service
during the reactor's extended shutdown that ended last August.
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