Cameco profit jumps on higher uranium sales
By Peter Koven
Uranium giant Cameco Corp. reported a 46% jump in first quarter earnings on Tuesday as it benefited from higher uranium sales and stronger realized prices.
Saskatoon-based Cameco said its adjusted profit was $124-million, or 31¢ a share. That was better than the consensus analyst estimate of 28¢.
Cameco shares climbed 4% on the Toronto Stock Exchange on Tuesday as investors welcomed the news.
“Our uranium business continues to drive our strong financial performance,” chief executive Tim Gitzel said in a statement. “This quarter, our sales volumes were up 33%, and although spot and long-term uranium prices were lower relative to a year ago, our average realized price increased.”
Cameco’s average uranium selling price was US$48.77 a pound, up 1% year-over-year. The increase is due to higher prices in fixed-price contracts, as older contracts have come to an end and been replaced by new ones at higher prices. The long-term contracts have allowed Cameco to weather much of the turmoil in the uranium industry since last year’s Fukushima nuclear disaster in Japan.
In total, Cameco sold 8.1 million pounds of uranium in Q1, after selling 6.1 million pounds in the first quarter of 2011. It produced 4.8 million pounds, up 2% year-over-year.
Cameco also said that its key Cigar Lake project, which has faced multiple delays and setbacks, is on track for first commissioning of ore in mid-2013. The mine is a key part of the company’s strategy to boost production to 40 million pounds of uranium a year by 2018.