Mistral, Delayed Submarine Projects May Cause Euro 300 Million loss to DCNS

DCNS, the French ship and submarine builder may be heading for a loss during 2014, the fist time since 2003.

Non delivery of the Mistral amphibious assault ship to Russia and delays in the Scorpene and Barracuda submarine projects to different customers has weighed down on the financials of the company, various French media outlets reported today.

In addition, a delay in the civil nuclear program of France has affected revenues of DNCS.  The loss of DNCS is also expected to affect the financials of Thales which owns 35% of DCNS.

DCNS is under threat of arbitration by Russia for holding back delivery of the Mistral ship which may lead to Euro 2.2 billion fine if the proceedings go against it. Russia has refused to make anymore payments under the Euro 1.1 billion deal unless the contract for the first ship is fulfilled.

However, its performance may improve in 2015 due to a recent contract with Egypt to supply warships and another with Saudi Arabia for patrol vessels.