* Shares down 20 pct in worst fall since company formed
* Posts H1 loss of 694 mln loss vs break-even year ago
* Exits concentrated thermal solar power business
* Cuts targets as utilities struggle (Adds worst one-day loss since merger, analyst comment)
By Geert De Clercq
PARIS, Aug 1 (Reuters) - Shares in French nuclear power group Areva closed 20 percent lower on Friday, the worst fall since the company was formed in 2001, as it posted a first-half loss, exited a thermal solar power business and cut sales targets.
The shares were down by as much as 23 percent earlier in the session with trading the busiest by volume since late February, when Areva posted a net loss of nearly half a billion euros.
Chief Executive Luc Oursel dropped a long-held target to sell 10 nuclear reactors by 2016, saying it would "take a few more years" and the firm warned that 2014 revenue would fall 10 percent, more than the 2-5 percent decline forecast in February.
Areva, which has not sold a new nuclear reactor since 2007, hopes French utility EDF will get the green light from European Union competition authorities this year to build two Areva reactors in Britain, but its reactor sales are suffering badly from the aftermath of the 2011 Fukushima disaster.
Billions of cost overruns and multi-year delays in four projects involving its flagship EPR reactor have also hit the state-owned firm's image, while Russian, Korean and American reactor builders are winning orders at its expense.
An attempt to diversify into renewable energy has led to more losses and the firm said on Friday it would close its concentrated solar power (CSP) business, which generated about 100 million euros ($134 million) in revenue per year but made tens of millions of losses.
About 100 jobs will be cut in the United States and India, a company spokesman said. CSP used mirrors to concentrate sunlight and produce steam.
Areva wrote down 373 million euros on the discontinued solar business. The firm booked a 305 million euro operating loss, reversing income of 290 million, and swung into a 694 million euro first-half loss after breaking even in first-half 2013.
Revenue fell 12.4 percent to 3.89 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) more than halved to 226 million euros from 487 million.
Oursel said the nuclear market environment had further deteriorated as construction projects for new reactors abroad as well as reactor overhaul operations in France had been delayed.
As a supplier to the utilities industry - which is suffering from overcapacity and slack power demand - Areva is feeling the impact of its customers' efforts to cut costs and is trying to make savings itself to restore profitability.
The firm hiked its cost cut target to 1.2 billion euros from 1 billion and said it would cut 1,500 jobs in Germany by the end of 2015, as well as 200 jobs in the United States this year. It had earlier warned of 1,200 to 1,500 job losses in Germany.
Areva, which is 87 percent state-owned, also cut its forecast for free operating cash flow before tax to "close to breakeven" in 2014 and 2015, and "distinctly positive" in 2016. In the first half, it stood at 71 million euros, versus a cash burn of 158 million in the first half of 2013.
In February, the firm forecast positive pretax free cash flow for 2014 and a "significant increase" in positive free operating cash flow before tax for 2015-16.
The firm maintained its forecast for organic revenue growth of around 4 to 5 percent per year in 2015-16 and set a target for an EBITDA to revenue ratio of 14-15 percent in 2016.
"Management maintains its 2015-16 targets ... although these appear challenging to us," Societe Generale equities analyst Alok Katre said in a note. (1 US dollar = 0.7470 euros) (Editing by Mark Potter and Greg Mahlich)