https://www.engineeringnews.co.za

Cameco net earnings slide 31%

30th July 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

Font size: - +

TORONTO (miningweekly.com) – Canada’s top uranium producer Cameco on Thursday reported a 31% slide in net earnings as higher costs and a C$28-million settlement charge weighed-down its bottom line.

Net earnings attributed to equity holders for the quarter ended June 30 were C$88-million, or C$0.22 a diluted share, compared with net earnings of C$127-million, or C$0.32 a share, in the comparable quarter of 2014.

Excluding special items, adjusted earnings in the period were C$46-million, or C$0.12 a share, down 41% year-on-year when compared with C$79-million, or C$0.20 a share, in the second quarter of 2014.

Production volumes in the quarter were 35% higher compared with the second quarter of 2014, mainly owing to production from Cigar Lake and higher output from McArthur River/Key Lake, which was partially offset by lower output at Rabbit Lake, all located in Saskatchewan’s Athabasca basin, Inkai, in Kazakhstan, and the company’s US operations.

The 13% increase in uranium revenues was a result of a 14% increase in the Canadian dollar average realised price, partially offset by a 1% decrease in sales volume.

EYES ON JAPAN
Cameco commented that the uranium market continued to be flat in the second quarter, with yellowcake spot prices remaining in the mid-$30/lb range. The quantity transacted in the spot market was at normal levels and no significant price trends emerged.

According to management, this flat environment was simply a function of the currently oversupplied market, where participants' uncovered requirements started to open up in the next two to three years. There were supply disruptions in the first half of 2015 that reduced the oversupply situation, but the reductions did not result in any notable change in spot or term demand from utilities.

Japan restarts remained the most important driver of market sentiment in the short term. While the market had been disappointed with ongoing delays, the first reactor restarts appeared to be imminent, with Kyushu having loaded fuel into Sendai Unit 1 for an expected restart in August, while preparing Sendai Unit 2 for a restart this fall.

“We remain confident that a significant number of units will be restarted in Japan over time, though the regulatory approval process and restart schedules are clearly hard to predict,” Cameco said.

Beyond these short-term challenges in the market, longer term, strong fundamentals underpinned a positive outlook for the industry. Globally, there were 64 reactors currently under construction, with a net increase of 82 reactors expected over the next decade.

China continued to execute its remarkable nuclear growth plan, with 26 reactors operating and 24 under construction. India continued to demonstrate confidence in its nuclear growth strategy, demonstrated by the signing of new long-term uranium supply agreements with major producers, including Cameco, in the previous quarter.

On the supply side, Cameco continued to see depressed market conditions having a negative impact on future supply potential, as suppliers struggled to justify the underlying economics. The cancellation of a planned mine expansion in Australia further supported the company’s view that current price levels did not justify the development of new uranium mines.

Edited by Tracy Hancock
Creamer Media Contributing Editor

Comments

Showroom

Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 
Goodwin Submersible Pumps Africa (Pty) Ltd
Goodwin Submersible Pumps Africa (Pty) Ltd

Goodwin Submersible Pumps Africa is sole distributors for Goodwin electrically driven, submersible, abrasion resistance slurry pumps.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.164 0.215s - 156pq - 2rq
Subscribe Now