AtkinsRealis Group Inc.
Awarded $937MM contract for the refurbishment of Unit 1 reactor in Romania
TSX: ATRL | CAD 74.63 | Outperform | Price Target CAD 84.00
Sentiment: Positive
What happened – Candu Energy (part of AtkinsRealis), in collaboration with Korea Hydro & Nuclear Power, Ansaldo Nucleare, and the Canadian Commercial Corporation, has been awarded a contract to provide design, engineering, procurement, as well as project & construction management services to complete a reactor re-tube project and 30-year life-extension on the Unit 1 CANDU reactor at the Cernavoda Nuclear Power Plant in Romania. AtkinsRealis' portion of this new contract is valued at $937 million, with the total value of contracts for the Cernavoda Unit 1 assigned to AtkinsRealis now nearing $1.9 billion. The contract is expected to close in February 2025, pending approvals from the Canadian government and the shareholders of Societatea Nationala Nuclearelectrica.
Background on Cernavoda – The Cernavoda site houses Romania’s only nuclear power plant, which provides ~20% of the country’s power and currently consists of two CANDU reactors (Units 1 and 2; site layout originally constructed for five reactors). Romania has recently announced the decision to build two new CANDU reactors (the contract was awarded to a joint venture that includes AtkinsRealis, see our note here), with the goal to ultimately phase out coal from the country's grid and become a regional hub for energy security and clean electricity in Eastern Europe.
Our thoughts – Overall, we view this news positively as AtkinsRealis is continuing to execute on the Nuclear runway ahead of it. Recall that AtkinsRealis has already been involved in Unit 1 work at Cernavoda in recent years (i.e., front-end Engineering), and today's official announcement of the reactor's refurbishment is a positive step forward. Looking ahead, we believe AtkinsRealis is well positioned in the nuclear sector to win future work given the company is the exclusive licensee of the CANDU reactor technology.