Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated
financial and operating results for the third quarter ended
September 30, 2024, in accordance with International Financial
Reporting Standards (IFRS).
“Our third quarter operational performance was strong across all
segments, supporting our return to a tier-one cost structure,” said
Tim Gitzel, Cameco’s president and CEO. “Looking past quarterly
earnings, which can vary significantly, there is a clear underlying
trend of improving operational performance and cash flow
generation, backed by stable and rising market prices. Apart from
the impact of a stronger US dollar, our financial outlook for both
Cameco and Westinghouse remained strong and unchanged. To recognize
the return to our tier-one production rate and the continued
strengthening of the industry’s long-term prospects, our board of
directors declared an increased 2024 annual dividend of $0.16 per
common share. We are also recommending a dividend growth plan to
our board of directors, under which we expect to at least double
last year’s dividend of $0.12 per common share, to $0.24 per common
share, over the fiscal periods 2024 through 2026, subject to annual
consideration by our board.
“Our disciplined strategy aligns our marketing, operational, and
financially focused decisions. From a marketing perspective, we
have contracts in both our uranium and fuel services segments that
have deliveries spanning more than a decade. However, in a market
where we are seeing sustained, positive momentum for nuclear
energy, we are continuing to be selective in committing our
unencumbered, tier-one, in-ground uranium inventory and UF6
conversion capacity under long-term contracts, to capture greater
upside for many years to come.
“The marketing element of our strategy guides our operational
decisions to ensure our supply aligns with our commitments, so we
balance our production rates, inventory position, long-term
purchases, product loans, and near-term market purchases in order
to deliver full-cycle value. This past quarter was a good example
of that prudent management of our supply sources, with our 2024
uranium production outlook increasing from 22.4 million pounds (our
share) of uranium, to up to 23.1 million pounds (our share) of
uranium, thanks to strong production from McArthur River/Key Lake.
The higher production level for 2024 is fully committed within our
contract portfolio and allows us to rebalance our other supply
sources, including a partial offset of the increase in Saskatchewan
by lower production and purchases from JV Inkai, where we now
expect production of 7.7 million pounds (100% basis) of uranium,
down about 600,000 pounds of uranium from last year due to the
ongoing acid supply challenges in Kazakhstan.
“The marketing and operational decisions set the stage for the
financial element of our strategy, under which we expect strong
cash flow generation to underpin our conservative capital
allocation priorities. Those priorities include a focus on debt
management, as is evident with the prudent refinancing activities
we have undertaken in 2024, and the prepayment of a large portion
of the term loan we utilized to purchase Westinghouse.
“We are continuing to see a positive shift in government,
industry and public support for nuclear energy, further supported
by recent announcements between utilities, reactor developers, and
the industrial energy users, who are now extending financial
support to ensure future access to clean, reliable and scalable
nuclear power. Cameco, with our assets and investments across the
fuel and reactor life cycles, is uniquely positioned to benefit
from those tailwinds as a responsible, commercial supplier with
multiple long-lived, tier-one assets in reliable jurisdictions,
proven operating experience, and a strong balance sheet to execute
our strategy. In a market where we are seeing sustained, positive
momentum for nuclear energy, we believe our disciplined strategy
will allow us to achieve our vision of ‘energizing a clean-air
world’ in a manner that reflects our values, including a commitment
to address the risks and opportunities that we believe will make
our business sustainable over the long term.”
- Dividend: Our board of directors declared a 2024 annual
dividend of $0.16 per common share, payable on December 13, 2024,
to shareholders of record on November 27, 2024. The decision to
declare an annual dividend is reviewed regularly by our board in
context of our cash flow, financial position, strategy and other
relevant factors, including appropriate alignment with the cyclical
nature of our earnings. To recognize the return to our tier-one
production rate, and in line with the principles of our capital
allocation framework, we have recommended to our board of directors
a dividend growth plan for consideration. Based on our plan, we
expect an annual increase of at least $0.04 per common share over
the fiscal periods 2024 through 2026, to achieve a doubling of the
2023 dividend from $0.12 per common share, to $0.24 per common
share. In 2022, the board increased the dividend by 50% to reflect
the expected improvement in our financial performance as we began
the transition to our tier-one run rate.
- Financial results impacted by purchase accounting: Third
quarter results reflect normal quarterly variations in sales
volumes, as well as delayed sales for Joint Venture Inkai (JV
Inkai) due to continued transportation challenges, and the ongoing
impact of purchase accounting for Westinghouse. Net earnings were
$7 million, adjusted net losses were $3 million, and adjusted
EBITDA was $308 million. During the first nine months of the year,
net earnings of $36 million and adjusted net earnings of $115
million were lower, while adjusted EBITDA of $1.0 billion was
higher than in 2023. Adjusted net earnings and adjusted EBITDA are
non-IFRS measures, see below.
- Strong 2024 financial outlook: We continue to expect
strong cash flow generation. Due to the continued strengthening of
the US dollar, we have updated our exchange rate assumption to
reflect the average rate year-to-date in 2024 of $1.00 (US) for
$1.35 (Cdn) (previously $1.00 (US) for $1.30 (Cdn)). As a result,
our expected uranium average realized price increased to $77.80 per
pound (previously $74.70 per pound), driving up several financial
outlook metrics, including estimated consolidated revenue for the
year, which is now expected to be about $3.01 billion to $3.16
billion (previously $2.85 billion to $3.0 billion), and our outlook
for our share of Westinghouse’s 2024 adjusted EBITDA, which is now
expected to be between $460 million and $530 million (previously
$445 million to $510 million). See Outlook for 2024 in our third
quarter MD&A for more information. Adjusted EBITDA attributable
to Westinghouse is a non-IFRS measure, see below.
- Strong uranium segment performance: In our uranium
segment, production volumes for the third quarter and for the first
nine months of the year were strong. Higher revenues and gross
profit compared to last year were primarily driven by higher sales
volume and higher Canadian dollar average realized price.
Deliveries of 7.3 million pounds during the quarter were higher
than the same period in 2023, while deliveries of 20.8 million
pounds year-to-date were slightly lower than the same period last
year due to normal quarterly variations, although it remained in
line with the delivery pattern disclosed in our annual MD&A.
Our annual expectation for uranium deliveries of between 32 million
and 34 million pounds remains unchanged. See Uranium in our third
quarter MD&A for more information.
- Increased 2024 uranium production outlook: We updated
our 2024 production outlook to be up to 37.0 million pounds (up to
23.1 million pounds our share) of uranium, to advance our strategy
in step with the positive market momentum and to meet our
commitments under our long-term contracts. The higher planned
annual production level is due to the consistent run rate at the
Key Lake mill, which we now expect to produce 19 million pounds
(100% basis) of uranium in 2024 (previously 18 million pounds of
uranium), partially offset by lower expected production and
purchases from JV Inkai. Expected market and committed purchases
for 2024 have been realigned to account for the increased
uncertainty on the timing of receipt of our remaining share of 2024
production from JV Inkai. We have either taken delivery of, or have
commitments for, the majority of our expected 2024 market
purchases, but may look for additional opportunities to add to our
inventory. See Outlook for 2024 in our third quarter MD&A for
more information.
- Inkai production lower than previously expected: At JV
Inkai, production for the third quarter was similar to last year,
but lower for the first nine months of this year compared to the
same period in 2023, due to differences in the annual mine plan, a
shift in the acidification schedule for new wellfields, and
unstable acid supply throughout the year. Maximum annual expected
production is now estimated to be approximately 7.7 million pounds
(100% basis) of uranium, as the previous target of 8.3 million
pounds of uranium was contingent upon receipt of sufficient volumes
of sulfuric acid in accordance with a specific schedule and is now
deemed unachievable. The first shipment containing approximately
2.3 million pounds of our share of Inkai’s 2024 production has
arrived at the Canadian port and is expected to arrive at the Blind
River refinery before the end of 2024. The timing for the shipment
of our remaining share of 2024 production is uncertain, and our
allocation of this year’s planned production from JV Inkai remains
under discussion. The timing of deliveries from JV Inkai impacts
our share of earnings from equity-accounted investee and the timing
of receipt of our share of dividends. An updated NI 43-101
technical report for the Inkai mine is being finalized and is
expected to be filed under Cameco’s profile on SEDAR+ within 45
days of this release. Changes to the mineral reserves, production
profile, costs, sensitivities, environmental and regulatory
matters, and other scientific and technical information will be
updated in the relevant sections of the report.
- Solid adjusted EBITDA from Westinghouse: While
Westinghouse reported a net loss of $57 million (our share), for
the third quarter compared to $47 million (our share) in the second
quarter, adjusted EBITDA was $122 million, compared to $121 million
in the second quarter. Due to normal variability in the timing of
its customer requirements, and delivery and outage schedules, we
expect to see stronger performance from the Westinghouse segment in
the fourth quarter, with higher expected cash flows. Purchase
accounting, which required the revaluation of Westinghouse’s
inventory and other assets at the time of acquisition, and the
expensing of certain non-operating acquisition-related transition
costs continues to impact quarterly earnings and our 2024 earnings
outlook. See Outlook for 2024 and Our earnings from Westinghouse in
our third quarter MD&A for more information.
- Selective long-term contracting, maintaining exposure to
higher prices: As of September 30, 2024, we had commitments
requiring delivery of an average of about 29 million pounds per
year from 2024 through 2028. We also have contracts in our uranium
and fuel services segments that span more than a decade, and in our
uranium segment, many of those contracts benefit from
market-related pricing mechanisms. In addition, we have a large and
growing pipeline of business under discussion both on- and
off-market, which we expect will help further build our long-term
contract portfolio.
- Maintaining financial discipline and balanced liquidity to
execute on strategy:
- Strong balance sheet: As of September 30, 2024, we had
$197 million in cash and cash equivalents and $1.3 billion in total
debt, demonstrating our ability to maintain liquidity while
prioritizing repayment of our term loan debt. In addition, we have
a $1.0 billion undrawn credit facility, which matures October 1,
2028. We continue to expect strong cash flow generation in
2024.
- Focused debt reduction: Thanks to our risk-managed
financial discipline, and strong cash position, in the third
quarter we continued to prioritize the reduction of the
floating-rate term loan used to finance the Westinghouse
acquisition, repaying another $100 million (US) of the remaining
$300 million (US) principal outstanding. We plan to continue to
prioritize repayment of the remaining $200 million (US) outstanding
principal on the term loan while balancing our liquidity and cash
position.
- Maintaining financial flexibility: We plan to file a new
base shelf prospectus in the fourth quarter as the existing
prospectus expired in October.
- Changes to the executive team: Effective October 7,
2024, David Doerksen was appointed senior vice-president and chief
marketing officer, overseeing the international marketing team in
the development and execution of Cameco’s marketing strategy, and
Lisa Aitken was appointed vice-president, marketing.
Consolidated financial results
THREE MONTHS
NINE MONTHS
HIGHLIGHTS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
($ MILLIONS EXCEPT WHERE INDICATED)
2024
2023
CHANGE
2024
2023
CHANGE
Revenue
721
575
25%
1,953
1,744
12%
Gross profit
171
152
13%
533
429
24%
Net earnings attributable to equity
holders
7
148
(95)%
36
281
(87)%
$ per common share (basic)
0.02
0.34
(94)%
0.08
0.65
(88)%
$ per common share (diluted)
0.02
0.34
(94)%
0.08
0.65
(88)%
Adjusted net earnings (losses) (ANE)
(non-IFRS, see below)
(3)
137
>(100)%
115
249
(54)%
$ per common share (adjusted and
diluted)
(0.01)
0.32
>(100)%
0.26
0.57
(54)%
Adjusted EBITDA (non-IFRS, see below)
308
234
32%
992
511
94%
Cash provided by operations (after working
capital changes)
52
185
(72)%
376
487
(23)%
The financial information presented for the three months and
nine months ended September 30, 2023, and September 30, 2024, is
unaudited.
Selected segment highlights
THREE MONTHS
NINE MONTHS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
HIGHLIGHTS
2024
2023
CHANGE
2024
2023
CHANGE
Uranium
Production volume (million lbs)
4.3
3.0
43%
17.3
11.9
45%
Sales volume (million lbs)
7.3
7.0
4%
20.8
22.2
(6)%
Average realized price1
($US/lb)
60.18
52.57
14%
58.28
48.62
20%
($Cdn/lb)
82.33
70.30
17%
78.97
65.40
21%
Revenue
600
489
23%
1,642
1,452
13%
Gross profit
154
139
11%
467
349
34%
Earnings before income taxes
171
218
(22)%
615
474
30%
Adjusted EBITDA2
240
224
7%
790
601
31%
Fuel services
Production volume (million kgU)
3.2
2.0
60%
9.9
9.6
3%
Sales volume (million kgU)
3.5
2.1
67%
7.9
7.8
1%
Average realized price 3
($Cdn/kgU)
34.54
39.87
(13)%
39.17
37.44
5%
Revenue
120
86
40%
311
291
7%
Earnings before income taxes
17
28
(39)%
71
97
(27)%
Adjusted EBITDA2
28
36
(22)%
96
121
(21)%
Adjusted EBITDA margin (%)2
23
42
(45)%
31
42
(26)%
Westinghouse
Revenue
726
-
n/a
2,052
-
n/a
(our share)
Net loss
(57)
-
n/a
(227)
-
n/a
Adjusted EBITDA2
122
-
n/a
320
-
n/a
1
Uranium average realized price is
calculated as the revenue from sales of uranium concentrate,
transportation and storage fees divided by the volume of uranium
concentrates sold.
2
Non-IFRS measure, see below.
3
Fuel services average realized price is
calculated as revenue from the sale of conversion and fabrication
services, including fuel bundles and reactor components,
transportation and storage fees divided by the volumes sold.
The table below shows the costs of produced and purchased
uranium incurred in the reporting periods (see non-IFRS measures
below). These costs do not include care and maintenance costs,
selling costs such as royalties, transportation and commissions,
nor do they reflect the impact of opening inventories on our
reported cost of sales.
THREE MONTHS
NINE MONTHS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
($CDN/LB)
2024
2023
CHANGE
2024
2023
CHANGE
Produced
Cash cost
29.21
32.37
(10)%
20.90
25.60
(18)%
Non-cash cost
10.40
12.24
(15)%
9.66
11.92
(19)%
Total production cost 1
39.61
44.61
(11)%
30.56
37.52
(19)%
Quantity produced (million lbs)1
4.3
3.0
43%
17.3
11.9
45%
Purchased
Cash cost
109.59
79.14
38%
100.13
69.88
43%
Quantity purchased (million lbs)1
1.8
0.8
>100%
6.2
5.0
24%
Totals
Produced and purchased costs
60.26
51.88
16%
48.91
47.09
4%
Quantities produced and purchased (million
lbs)
6.1
3.8
61%
23.5
16.9
39%
1
Due to equity accounting, our share of
production from JV Inkai is shown as a purchase at the time of
delivery. These purchases will fluctuate during the quarters and
timing of purchases will not match production. There were no
purchases during the quarter. In the first nine months of 2024, we
purchased 1.2 million pounds at a purchase price per pound of
$128.42 ($95.63 (US)).
Non-IFRS measures
The non-IFRS measures referenced in this document are
supplemental measures, which are used as indicators of our
financial performance. Management believes that these non-IFRS
measures provide useful supplemental information to investors,
securities analysts, lenders and other interested parties in
assessing our operational performance and our ability to generate
cash flows to meet our cash requirements. These measures are not
recognized measures under IFRS, do not have standardized meanings,
and are therefore may not be comparable to similarly titled
measures presented by other companies. Accordingly, these measures
should not be considered in isolation or as a substitute for the
financial information reported under IFRS. We are not able to
reconcile our forward-looking non-IFRS guidance because we cannot
predict the timing and amounts of discrete items, which could
significantly impact our IFRS results.
The following are the non-IFRS measures used in this
document.
ADJUSTED NET EARNINGS
Adjusted net earnings is our net earnings attributable to equity
holders, adjusted for non-operating or non-cash items such as gains
and losses on derivatives and adjustments to reclamation provisions
flowing through other operating expenses, that we believe do not
reflect the underlying financial performance for the reporting
period. Other items may also be adjusted from time to time. We
adjust this measure for certain of the items that our
equity-accounted investees make in arriving at other non-IFRS
measures. Adjusted net earnings is one of the targets that we
measure to form the basis for a portion of annual employee and
executive compensation (see Measuring our results in our 2023
annual MD&A).
In calculating ANE we adjust for derivatives. We do not use
hedge accounting under IFRS and, therefore, we are required to
report gains and losses on all hedging activity, both for contracts
that close in the period and those that remain outstanding at the
end of the period. For the contracts that remain outstanding, we
must treat them as though they were settled at the end of the
reporting period (mark-to-market). However, we do not believe the
gains and losses that we are required to report under IFRS
appropriately reflect the intent of our hedging activities, so we
make adjustments in calculating our ANE to better reflect the
impact of our hedging program in the applicable reporting period.
See Foreign exchange in our 2023 annual MD&A for more
information.
We also adjust for changes to our reclamation provisions that
flow directly through earnings. Every quarter we are required to
update the reclamation provisions for all operations based on new
cash flow estimates, discount and inflation rates. This normally
results in an adjustment to an asset retirement obligation asset in
addition to the provision balance. When the assets of an operation
have been written off due to an impairment, as is the case with our
Rabbit Lake and US ISR operations, the adjustment is recorded
directly to the statement of earnings as “other operating expense
(income)”. See note 10 of our interim financial statements for more
information. This amount has been excluded from our ANE
measure.
As a result of the change in ownership of Westinghouse when it
was acquired by Cameco and Brookfield, Westinghouse’s inventories
at the acquisition date were revalued based on the market price at
that date. As these quantities are sold, Westinghouse’s cost of
products and services sold reflect these market values, regardless
of their historic costs. Our share of these costs is included in
earnings from equity-accounted investees and recorded in cost of
products and services sold in the investee information (see note 7
to the financial statements). Since this expense is non-cash,
outside of the normal course of business and only occurred due to
the change in ownership, we have excluded our share from our ANE
measure.
Westinghouse has also expensed some non-operating
acquisition-related transition costs that the acquiring parties
agreed to pay for, which resulted in a reduction in the purchase
price paid. Our share of these costs is included in earnings from
equity-accounted investees and recorded in other expenses in the
investee information (see note 7 to the financial statements).
Since this expense is outside of the normal course of business and
only occurred due to the change in ownership, we have excluded our
share from our ANE measure.
To facilitate a better understanding of these measures, the
table below reconciles adjusted net earnings with our net earnings
for the third quarter and first nine months of 2024 and compares it
to the same periods in 2023.
THREE MONTHS
NINE MONTHS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
($ MILLIONS)
2024
2023
2024
2023
Net earnings attributable to equity
holders
7
148
36
281
Adjustments
Adjustments on derivatives
(28
)
41
19
-
Inventory purchase accounting (net of
tax)
-
-
50
-
Acquisition-related transition costs (net
of tax)
5
-
24
-
Adjustment to other operating expense
(income)
5
(48
)
(12
)
(42
)
Income taxes on adjustments
8
(4
)
(2
)
10
Adjusted net earnings (losses)
(3
)
137
115
249
The following table shows what contributed to the change in
adjusted net earnings (non-IFRS measure, see above) for the third
quarter and first nine months of 2024 compares to the same periods
in 2023.
THREE MONTHS
NINE MONTHS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
($ MILLIONS)
IFRS
ADJUSTED
IFRS
ADJUSTED
Net earnings - 2023
148
137
281
249
Change in gross profit by segment
(We calculate gross profit by deducting
from revenue the cost of products and services sold, and
depreciation and amortization (D&A), net of hedging
benefits)
Uranium
Impact from sales volume changes
6
6
(22
)
(22
)
Higher realized prices ($US)
74
74
270
270
Foreign exchange impact on realized
prices
14
14
12
12
Higher costs
(78
)
(78
)
(139
)
(139
)
Change – uranium
16
16
121
121
Fuel services
Impact from sales volume changes
9
9
2
2
Higher (lower) realized prices ($Cdn)
(19
)
(19
)
14
14
Lower (higher) costs
13
13
(32
)
(32
)
Change – fuel services
3
3
(16
)
(16
)
Other changes
Lower administration expenditures
15
15
11
11
Higher exploration and research and
development expenditures
(2
)
(2
)
(10
)
(10
)
Change in reclamation provisions
(66
)
(13
)
(40
)
(10
)
Lower earnings from equity-accounted
investees
(66
)
(61
)
(176
)
(102
)
Change in gains or losses on
derivatives
68
(1
)
(23
)
(4
)
Change in foreign exchange gains or
losses
(68
)
(68
)
-
-
Lower finance income
(30
)
(30
)
(75
)
(75
)
Higher finance costs
(12
)
(12
)
(48
)
(48
)
Change in income tax recovery or
expense
3
15
13
1
Other
(2
)
(2
)
(2
)
(2
)
Net earnings (losses) - 2024
7
(3
)
36
115
EBITDA
EBITDA is defined as net earnings attributable to equity
holders, adjusted for the costs related to the impact of the
company’s capital and tax structure including depreciation and
amortization, finance income, finance costs (including accretion)
and income taxes. Included in EBITDA is our share of
equity-accounted investees.
ADJUSTED EBITDA
Adjusted EBITDA is defined as EBITDA, as further adjusted for
the impact of certain costs or benefits incurred in the period
which are either not indicative of the underlying business
performance or that impact the ability to assess the operating
performance of the business. These adjustments include the amounts
noted in the ANE definition.
In calculating adjusted EBITDA, we also adjust for items
included in the results of our equity-accounted investees that are
not adjustments to arrive at our ANE measure. These items are
reported as part of other expenses within the investee financial
information and are not representative of the underlying
operations. These primarily include transaction, integration and
restructuring costs related to acquisitions.
The company may realize similar gains or incur similar
expenditures in the future.
ADJUSTED EBITDA MARGIN
Adjusted EBITDA margin is defined as adjusted EBITDA divided by
revenue for the appropriate period.
EBITDA, adjusted EBITDA and adjusted EBITDA margin are non-IFRS
measures which allow us and other users to assess results of
operations from a management perspective without regard for our
capital structure.
To facilitate a better understanding of these measures, the
tables below reconcile net earnings with EBITDA and adjusted EBITDA
for the third quarter and first nine months of 2024 and 2023.
For the quarter ended September 30, 2024:
FUEL
($ MILLIONS)
URANIUM
SERVICES
WESTINGHOUSE
OTHER
TOTAL
Net earnings (loss) attributable to
equity holders
171
17
(57
)
(124
)
7
Depreciation and amortization
59
11
-
1
71
Finance income
-
-
-
(4
)
(4
)
Finance costs
-
-
-
35
35
Income taxes
-
-
-
38
38
230
28
(57
)
(54
)
147
Adjustments on equity investees
Depreciation and amortization
2
-
93
-
Finance expense
-
-
54
-
Income taxes
3
-
(2
)
-
Net adjustments on equity investees
5
-
145
-
150
EBITDA
235
28
88
(54
)
297
Loss on derivatives
-
-
-
(28
)
(28
)
Other operating expense
5
-
-
-
5
5
-
-
(28
)
(23
)
Adjustments on equity investees
Acquisition-related transition costs
-
-
7
-
Other expenses
-
-
27
-
Net adjustments on equity investees
-
-
34
-
34
Adjusted EBITDA
240
28
122
(82
)
308
For the quarter ended September 30, 2023:
FUEL
($ MILLIONS)
URANIUM
SERVICES
OTHER
TOTAL
Net earnings (loss) attributable to
equity holders
218
28
(98
)
148
Depreciation and amortization
47
8
1
56
Finance income
-
-
(34
)
(34
)
Finance costs
-
-
23
23
Income taxes
-
-
41
41
265
36
(67
)
234
Adjustments on equity investees
Depreciation and amortization
2
-
-
Income taxes
5
-
-
Net adjustments on equity investees
7
-
-
7
EBITDA
272
36
(67
)
241
Gain on derivatives
-
-
41
41
Other operating income
(48
)
-
-
(48
)
Adjusted EBITDA
224
36
(26
)
234
For the nine months ended September 30, 2024:
FUEL
($ MILLIONS)
URANIUM1
SERVICES
WESTINGHOUSE
OTHER
TOTAL
Net earnings (loss) attributable to
equity holders
615
71
(227
)
(423
)
36
Depreciation and amortization
148
25
-
4
177
Finance income
-
-
-
(18
)
(18
)
Finance costs
-
-
-
117
117
Income taxes
-
-
-
87
87
763
96
(227
)
(233
)
399
Adjustments on equity investees
Depreciation and amortization
12
-
267
-
Finance income
-
-
(3
)
-
Finance expense
-
-
172
-
Income taxes
27
-
(50
)
-
Net adjustments on equity investees
39
-
386
-
425
EBITDA
802
96
159
(233
)
824
Gain on derivatives
-
-
-
19
19
Other operating income
(12
)
-
-
-
(12
)
(12
)
-
-
19
7
Adjustments on equity investees
Inventory purchase accounting
-
-
66
-
Acquisition-related transition costs
-
-
32
-
Other expenses
-
-
63
-
Net adjustments on equity investees
-
-
161
-
161
Adjusted EBITDA
790
96
320
(214
)
992
For the nine months ended September 30, 2023:
FUEL
($ MILLIONS)
URANIUM1
SERVICES
OTHER
TOTAL
Net earnings (loss) attributable to
equity holders
474
97
(290
)
281
Depreciation and amortization
147
24
3
174
Finance income
-
-
(93
)
(93
)
Finance costs
-
-
69
69
Income taxes
-
-
100
100
621
121
(211
)
531
Adjustments on equity investees
Depreciation and amortization
6
-
-
Income taxes
16
-
-
Net adjustments on equity investees
22
-
-
22
EBITDA
643
121
(211
)
553
Other operating income
(42
)
-
-
(42
)
Adjusted EBITDA
601
121
(211
)
511
CASH COST PER POUND, NON-CASH COST PER POUND AND TOTAL COST
PER POUND FOR PRODUCED AND PURCHASED URANIUM
Cash cost per pound, non-cash cost per pound and total cost per
pound for produced and purchased uranium are non-IFRS measures. We
use these measures in our assessment of the performance of our
uranium business. These measures are not necessarily indicative of
operating profit or cash flow from operations as determined under
IFRS.
To facilitate a better understanding of these measures, the
table below reconciles these measures to cost of product sold and
depreciation and amortization for the third quarter and first nine
months of 2024 and 2023.
THREE MONTHS
NINE MONTHS
ENDED SEPTEMBER 30
ENDED SEPTEMBER 30
($ MILLIONS)
2024
2023
2024
2023
Cost of product sold
386.5
304.6
1,027.0
959.1
Add / (subtract)
Royalties
(38.4
)
(22.3
)
(88.5
)
(61.0
)
Care and maintenance costs
(13.4
)
(12.1
)
(37.3
)
(35.2
)
Other selling costs
(2.9
)
(3.0
)
(12.2
)
(7.1
)
Change in inventories
(8.9
)
(106.8
)
93.4
(201.8
)
Cash costs of production (a)
322.9
160.4
982.4
654.0
Add / (subtract)
Depreciation and amortization
59.3
47.1
147.5
147.2
Care and maintenance costs
(0.2
)
(0.8
)
(0.6
)
(3.4
)
Change in inventories
(14.4
)
(9.6
)
20.2
(2.0
)
Total production costs (b)
367.6
197.1
1,149.5
795.8
Uranium produced & purchased (million
lbs) (c)
6.1
3.8
23.5
16.9
Cash costs per pound (a ÷ c)
52.93
42.21
41.80
38.70
Total costs per pound (b ÷ c)
60.26
51.88
48.91
47.09
Management's discussion and analysis (MD&A) and financial
statements
The third quarter MD&A and unaudited condensed consolidated
interim financial statements provide a detailed explanation of our
operating results for the three and nine months ended September 30,
2024, as compared to the same periods last year. This news release
should be read in conjunction with these documents, as well as our
audited consolidated financial statements and notes for the year
ended December 31, 2023, first quarter, second quarter and annual
MD&A, and our most recent annual information form, all of which
are available on our website at cameco.com, on SEDAR+ at
sedarplus.ca, and on EDGAR at sec.gov/edgar.shtml.
Qualified persons
The technical and scientific information discussed in this
document for our material properties McArthur River/Key Lake, Cigar
Lake and Inkai was approved by the following individuals who are
qualified persons for the purposes of NI 43-101:
MCARTHUR RIVER/KEY LAKE
- Greg Murdock, general manager, McArthur River, Cameco
- Daley McIntyre, general manager, Key Lake, Cameco
CIGAR LAKE
- Kirk Lamont, general manager, Cigar Lake, Cameco
INKAI
- Sergey Ivanov, deputy director general, technical services,
Cameco Kazakhstan LLP
Caution about forward-looking information
This news release includes statements and information about our
expectations for the future, which we refer to as forward-looking
information. Forward-looking information is based on our current
views, which can change significantly, and actual results and
events may be significantly different from what we currently
expect. Examples of forward-looking information in this news
release include: our view that our third quarter operational
performance supports our return to a tier-one cost structure, and
that there is a trend of improving operational performance and cash
flow generation, backed by stable and rising market prices; our
financial outlook for both Cameco and Westinghouse; our expectation
of continued strengthening of the industry’s long term prospects;
our recommended dividend growth plan and expectations regarding
dividend payments, and increases through 2026; our perception of
sustained, positive momentum for nuclear energy, and our ability to
capture greater upside in future years; our view that our strategy
will align with our commitments, permitting us to deliver
fully-cycle value; our 2024 uranium production outlook; our ability
to rebalance our supply sources; our production expectations for JV
Inkai; our expectation of strong cash flow generation, and
intention to prioritize debt management and reduction while
maintaining liquidity and strong cash flow generation; our
perception of a positive shift in government, industry and public
support for nuclear energy, and continuing financial support for
access to nuclear power; our belief that Cameco is uniquely
positioned to benefit from those developments; our expected ability
to achieve our vision, including a commitment to make our business
sustainable over the long term; our expected uranium average
realized prices, production and deliveries and outlook for our
share of Westinghouse’s 2024 adjusted EBITDA, as well as its
performance and cash flows; expected Key Lake Mill and JV Inkai
production levels, and timing of shipments and deliveries; the
expected timing of the finalization and filing of a new technical
report for the Inkai mine; our expectations regarding the building
of our long-term contract portfolio and pipeline of business under
discussion; our intention to file a new base shelf prospectus in
the fourth quarter; and the timing of our third quarter conference
call and announcement of our 2024 fourth quarter and annual
results.
Material risks that could lead to different results include:
unexpected changes in uranium supply, demand, long-term
contracting, and prices; changes in consumer demand for nuclear
power and uranium as a result of changing societal views and
objectives regarding nuclear power, electrification and
decarbonization; the risk that our views regarding nuclear power,
its growth profile, and benefits, may prove to be incorrect; the
risk that we may not be able to achieve planned production levels
within the expected timeframes, or that the costs involved in doing
so exceed our expectations; the risk that the production levels at
Inkai may not be at expected levels due to the unavailability of
sufficient volumes of sulfuric acid or for any other reason, or
that it may not be able to deliver its production when expected,
risks to Westinghouse’s business associated with potential
production disruptions, the implementation of its business
objectives, compliance with licensing or quality assurance
requirements, or that it may otherwise be unable to achieve
expected growth; the risk that we may not be able to meet sales
commitments for any reason; the risks to our business associated
with potential production disruptions, including those related to
global supply chain disruptions, global economic uncertainty,
political volatility, labour relations issues, and operating risks;
the risk that we may not be able to implement our business
objectives in a manner consistent with our environmental, social,
governance and other values; the risk that the strategy we are
pursuing may prove unsuccessful, or that we may not be able to
execute it successfully; the risk that Westinghouse may not be able
to implement its business objectives in a manner consistent with
its or our environmental, social, governance and other values; the
filing of our new base shelf prospectus or the new technical report
for the Inkai mine may be delayed for unanticipated reasons; we may
be unable to pay dividends on our common shares through 2026 in the
amounts we currently expect; and the risk that we may be delayed in
announcing our future financial results.
In presenting the forward-looking information, we have made
material assumptions which may prove incorrect about: uranium
demand, supply, consumption, long-term contracting, growth in the
demand for and global public acceptance of nuclear energy, and
prices; our production, purchases, sales, deliveries and costs; the
market conditions and other factors upon which we have based our
future plans and forecasts; our contract pipeline discussions;
Inkai production, its receipt of sufficient volumes of sulfuric
acid, and our allocation of planned production and timing of
deliveries; assumptions about Westinghouse’s production, purchases,
sales, deliveries and costs, the absence of business disruptions,
and the success of its plans and strategies; the success of our
plans and strategies, including planned production; the absence of
new and adverse government regulations, policies or decisions; that
there will not be any significant adverse consequences to our
business resulting from production disruptions, including those
relating to supply disruptions, economic or political uncertainty
and volatility, labour relation issues, aging infrastructure, and
operating risks; the assumptions relating to Westinghouse’s
adjusted EBITDA; the filing of our new base shelf prospectus and
the new technical report for the Inkai mine will not be delayed for
unanticipated reasons; annual dividends on our common shares will
be declared and paid in the amounts we expected through 2026 and
our ability to announce future financial results when expected.
Please also review the discussion in our 2023 annual MD&A,
our 2024 first and second quarter MD&A and our most recent
annual information form for other material risks that could cause
actual results to differ significantly from our current
expectations, and other material assumptions we have made.
Forward-looking information is designed to help you understand
management’s current views of our near-term and longer-term
prospects, and it may not be appropriate for other purposes. We
will not necessarily update this information unless we are required
to by securities laws.
Conference call
We invite you to join our third quarter conference call on
Thursday, November 7, 2024, at 8:00 a.m. Eastern.
The call will be open to all investors and the media. To join
the call, please dial (844) 763-8274 (Canada and US) or (647)
484-8814. An operator will put your call through. The slides and a
live webcast of the conference call will be available from a link
at cameco.com. See the link on our home page on the day of the
call.
A recorded version of the proceedings will be available:
- on our website, cameco.com, shortly after the call
- on post view until midnight, Eastern, December 7, 2024, by
calling (855) 669-9658 (Canada/ USA toll-free) or (412) 317-0088
(International toll) (Passcode 7713061)
2024 fourth quarter and annual report release date
We plan to announce our 2024 fourth quarter and annual
consolidated financial and operating results before markets open on
February 20, 2025. Announcement dates are subject to change.
Profile
Cameco is one of the largest global providers of the uranium
fuel needed to energize a clean-air world. Our competitive position
is based on our controlling ownership of the world’s largest
high-grade reserves and low-cost operations, as well as significant
investments across the nuclear fuel cycle, including ownership
interests in Westinghouse Electric Company and Global Laser
Enrichment. Utilities around the world rely on Cameco to provide
global nuclear fuel solutions for the generation of safe, reliable,
carbon-free nuclear power. Our shares trade on the Toronto and New
York stock exchanges. Our head office is in Saskatoon,
Saskatchewan, Canada.
As used in this news release, the terms we, us, our, the Company
and Cameco mean Cameco Corporation and its subsidiaries unless
otherwise indicated.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106081013/en/
Investor inquiries:
Cory Kos 306-716-6782 cory_kos@cameco.com
Media inquiries:
Veronica Baker 306-385-5541 veronica_baker@cameco.com
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