AtkinsRéalis has once again revised upwards its growth prospects for its nuclear sector in 2024, seeing “exceptional opportunities” particularly for the refurbishment of CANDU reactors.
The company formerly known as SNC-Lavalin has doubled its growth forecast for nuclear power in the space of a few months. In the winter, the Montreal-based company was predicting a range of 12 to 15 per cent before raising it to 15 to 20 per cent in June.
On Friday, AtkinsRéalis said it now expects revenue growth to be between 30% and 35%.
The company says it has seen “solid growth” and “confidence in sustained demand” for this sector of activity, which allows it to be more optimistic.
In the second quarter, which ended June 30, the Nuclear Energy sector’s revenue reached 357.6 million, up 42.4% compared to the same period last year, when the sector had revenue of 251.2 million.
“The nuclear industry continues to grow,” AtkinsRéalis President and CEO Ian L. Edwards said on a conference call with financial analysts to discuss quarterly results.
He notes a “global interest” as, he says, governments and utilities realize that “the real component of a carbon-neutral electricity grid is to have a nuclear component for baseload power.”
“What really motivates us in the short term is the life extension of the CANDU reactors,” the executive added. A large part of the nuclear energy sector’s revenue comes from refurbishing these reactors, he said.
Several projects are underway and others are under negotiation around the world, Edwards said.
AtkinsRéalis, which is the current original equipment manufacturer and custodian of this technology, recently signed a new contract for this type of work. The company announced Thursday that it will participate in the refurbishment of the two CANDU reactors at the Qinshan nuclear power plant in China. The Quebec company will provide design, engineering and procurement services, among other things.
It is a very cheap form of electricity. Simply replace the reactor components to get an additional 30 years of life.
Ian L. Edwards, President and CEO of AtkinsRéalis
Discussions are also underway about the recent technological version of the CANDU, the MONARK, indicated the boss of AtkinsRéalis. According to him, it will take a few years before winning orders and generating revenue for this new model.
He also sees strong growth in the services side of the company’s Nuclear Energy sector, particularly to support the deployment of small modular reactors.
Financial results
Companywide, revenue totaled $2.36 billion in the second quarter, up about 11% from $2.13 billion in the same period last year.
This increase in revenues notably allowed the Montreal company to achieve a net profit of 82.2 million in the second quarter, compared to 63.8 million a year ago. Adjusted diluted earnings per share came to 49 cents, slightly less than analysts’ forecast.
Before the results were released, analysts had expected adjusted earnings of 50 cents per share, but revenue of $2.29 billion, according to financial data firm Refinitiv.
AtkinsRéalis will pay a dividend of 2 cents per share on September 6.