Paladin posts loss as sales revenue falls as output costs rise

JOHANNESBURG (miningweekly.com) – Uranium producer Paladin Energy posted a net loss for the six months ended December 2017, as sales revenue fell on higher production costs and lower uranium prices.

The company, which has been processing stockpiles since physical mining ceased at its Langer Heinrich mine, in Namibia, produced 1.71-million pounds of uranium oxide in the six months ended December 31, down 31% from the previous corresponding period’s 2.5-million pounds.

However, the cost of that production is exceeding the price that the company can obtain for the product.

C1 cash cost of production rose sharply from a record-low of $16.25/lb in December 2016, to $23.11/lb in December 2017, owing to lower production and higher reagent usage.

The average realised uranium sales price of the six-month period was $21.82/lb.

Total sales revenue for the half-year fell by 33% from $55.17-million in 2016 to $36.89-million in the December 2017 half-year, as a result of a 16% decrease in the realised sales price and a 20% decrease in sales volume.

Paladin posted a net loss of $17.41-million, slightly wider than the net loss of $17.82-million of the corresponding period. However, underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) deteriorated by $5.67-million, from an underlying Ebitda of $5.61-million in the 2016 half-year to a loss of $46-million.

The firm recognised writedowns of $16.58-million, comprising $4.81-milllion of Langer Heinrich ore stockpiles, $3.9-million of product-in-circuit and $7.80-million of finished goods owing to the low uranium price.

At the end of December 2017, Paladin had $26.90-million cash and cash equivalents.

Paladin recently relisted on the ASX after having completed a recapitalisation, following which its debt was reduced from $715-million to $44-million.