Cameco Corporation (TSX: CCO) released its consolidated financial and operational results for the second quarter ending June 30, 2024. The firm recorded $598 million in revenue, down from Q1 2024’s $634 million but up from Q2 2023’s $482 million.

“Second quarter operational performance was strong, driving financial results that remain in line with our full-year 2024 outlook,” said Tim Gitzel, Cameco’s president and CEO. He acknowledged the impact of normal quarterly variability and acquisition-related costs, particularly those associated with Westinghouse.

Cameco reported net earnings of $36 million and adjusted net earnings of $62 million for the second quarter, with an adjusted EBITDA of $337 million. Net earnings for the quarter ended at $0.08 per share. These figures compare to last year’s net earnings of $14 million, adjusted net loss of $3 million, and adjusted EBITDA of $54 million.

These contributed to the firm’s first half of the year performance which saw net earnings of $29 million, adjusted net earnings of $118 million, and an adjusted EBITDA of $681 million. These results were driven by variations in contract deliveries and the inclusion of Westinghouse, which has been performing in line with expectations despite quarterly fluctuations.

“Our financial results continue to reflect a transition to tier-one economics,” Gitzel noted, pointing to a significant increase in gross profit due to higher sales volume and the average realized price in Canadian dollars.

In the uranium segment, Cameco saw a substantial production increase of 61% compared to the previous year, with 7.1 million pounds produced in the second quarter. Sales volume increased by 13% to 6.2 million pounds, with a 14% rise in the average realized price to $56.43 per pound in USD. Revenue for the segment grew by 30% to $481 million, and gross profit doubled to $144 million.

The fuel services segment experienced a decline in production volume by 15% due to operational issues in the first half of 2024, resulting in a slight increase in the average unit cost of sales. Despite this, the company maintained its annual production expectation of 13.5 to 14.5 million kgU of combined fuel services products for the year.

Cameco also reported that their joint venture partner, Kazatomprom, faced production issues in the first half of 2024 due to a sulfuric acid shortage. These challenges significantly impacted output, and the 2024 production expectation of 8.3 million pounds of U3O8 remains tentative, contingent on stabilizing sulfuric acid deliveries.

Nevertheless, Cameco boasts that its long-term contract portfolio remains strong, with commitments requiring delivery of approximately 29 million pounds per year from 2024 through 2028.

The company also said that its financial strategy is centered on maintaining a strong balance sheet, reducing debt, and prudent refinancing. As of June 30, 2024, Cameco had $362 million in cash and cash equivalents, and total debt of $1.4 billion. The company repaid $100 million of the floating-rate term loan used for the Westinghouse acquisition, prioritizing further debt reduction while balancing liquidity needs.

Cameco reiterated its 2024 financial outlook, expecting consolidated revenue between $2.85 billion and $3.0 billion. The company’s share of Westinghouse’s adjusted EBITDA is projected between $445 million and $510 million. Gitzel emphasized the strategic advantages of Cameco’s tier-one assets and disciplined approach amid sustained positive momentum for nuclear energy.

“Nuclear energy is clearly being recognized as a critical tool in the fight against climate change,” Gitzel stated, highlighting the company’s positioning to benefit from this recognition through reliable supply and market expertise.

Cameco last traded at $61.35 on the TSX.

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