Thorp delays will cost BNFL pounds 110m: Profits fall after inclusion of exceptional items and dividend payment to Government is halved

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The Independent Online
REGULATORY delays in commissioning British Nuclear Fuels' Thorp facility, the spent nuclear fuel reprocessing plant at Sellafield on the Cumbrian coast, will cost the state-owned company pounds 110m, says John Guinness, chairman.

Mr Guinness was speaking as BNFL reported a 53 per cent reduction in pre-tax profits from pounds 161m to pounds 76m for the year to 31 March. The fall was accompanied by a corresponding 50 per cent cut to pounds 26m in BNFL's dividend payment to the Government, its sole shareholder.

Construction of the pounds 2.8bn Thorp (Thermal Oxide Reprocessing Plant) facility ended almost two years ago. After extensive consultation John Gummer, Environment Secretary, gave the go-ahead to the project in December and the plant became active last month.

The Government's decision is being challenged by Greenpeace, the environmental pressure group, and Lancashire County Council in the High Court in a judicial review hearing set to begin next Monday.

BNFL blamed the halving of profits in 1992-93 - turnover was held at pounds 1.05bn - on five exceptional items totalling pounds 122m, of which delays in commissioning Thorp accounted for pounds 18m.

Mr Guinness said that Thorp delays would cost another pounds 90m in the 1993-94 financial year ending next month and this would hold back profits to the previous year's levels.

Other significant exceptional costs in 1992-93 included a pounds 30m charge resulting from the closure of magno reprocessing at Sellafield for nine weeks in the autumn of 1992.

The company wrote off pounds 40m in advance of a merger of its enrichment assets into Urenco, in which it has Dutch and German partners.

Staff cuts led to a pounds 20m restructuring charge - there will have been an underlying fall of 1,000 jobs in the two years to the end of next month. Increased spending of pounds 14m on new research and development facilities was also charged to profits.

Neville Chamberlain, chief executive, said that with the lack of significant expansion of the nuclear home market in prospect BNFL would only grow if it could attract more business from abroad.

Overseas customers usually account for 20 per cent of BNFL's turnover. During the year contracts were won to supply fuel to European utilities and run waste management contracts in the US.

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