TORONTO (miningweekly.com) – Uranium giant Cameco Corp on Friday reported net earnings of C$82-million, 38% lower than a year earlier, after uranium sales volumes declined and costs rose, but the company raised its outlook for uranium sales and revenue for the full year.
Stripping out certain once-off items, adjusted net earnings were C$89-million, compared with C$148-million a year earlier, while group revenue declined 4%, to C$615-million.
“In our uranium business, higher costs of sales adversely affected uranium profits in the first quarter,” the company said in a statement.
“Overall costs of sales are forecast to rise by 15% to 20% as we expect to purchase additional uranium at prices substantially higher than our costs of production to take advantage of trading opportunities.”
Lower earnings in the uranium and gold businesses were partially offset by improved results in the electricity business, Cameco said.
Uranium production in the first quarter rose to 4,8-million pounds, from 3,8-million pounds a year earlier.
However, sales of the nuclear fuel slid to 7,1-million pounds, compared with 7,4-million pounds in the first quarter of 2008.
"The timing of deliveries of uranium products within a calendar year is at the discretion of customers. Therefore, our quarterly delivery patterns can vary significantly," the company said.
The company increased its full-year uranium sales guidance to between 32-million and 34-million pounds, compared with an earlier forecast of 31-million to 33-million pounds, “due to new commitments entered into with deliveries in 2009”.
As a result, uranium revenue for 2009 is only expected to decrease 2% to 5% compared with last year, which is less than the previously estimated decrease of 5% to 10%.
In February, the company sold shares in a bought-deal offering to raise C$460-million, which it said would allow it to take advantage of opportunities created by the current environment.
CEO Jerry Grandey said a few days before the financing was announced that the uranium miner was “constantly assessing acquisition opportunities”.