• Adjusted EBITDA: Nearly $1 billion for the first nine months before acquisition-related adjustments.
• Dividend Increase: From $0.12 in 2023 to $0.16 per common share for 2024, with a plan to grow to $0.24 by 2026.
• Uranium Production: Expected production of about 19 million pounds at Key Lake, up from 18 million pounds.
• JV Inkai Uranium Production: Expected production of about 7.7 million pounds, down from 8.3 million pounds.
• Fuel Services Production: 60% higher than the third quarter last year.
• Debt Repayment: Additional repayment of USD 100 million on the floating rate term loan, totaling $400 million year-to-date.

• Warning! GuruFocus has detected 2 Warning Sign with CCJ.
• High Yield Dividend Stocks in Gurus' Portfolio
• This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
• How to calculate the intrinsic value of a stock?

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cameco Corp (NYSE:CCJ) reported a trend of improving operational performance in both uranium and fuel services segments, supporting a Tier 1 cost structure and dividend growth.
• The company is well-positioned with nearly $1 billion in adjusted EBITDA for the first nine months, driven by stable and rising market prices.
• Cameco Corp (NYSE:CCJ) has increased its dividend from $0.12 in 2023 to $0.16 per common share for 2024, with plans to double it to $0.24 by 2026.
• Production at the Key Lake mill exceeded expectations, with an improved outlook of about 19 million pounds, up from 18 million pounds previously.
• The company is seeing significant interest in the tight conversion segment of the fuel cycle, which remains at historic prices higher than anticipated.

Negative Points

• Equity earnings from Westinghouse were impacted by the amortization of intangible assets, affecting the financial performance.
• Long-term contracting through the first nine months of the year remained relatively slow, impacting future supply planning.
• Production at JV Inkai in Kazakhstan is expected to be lower due to ongoing challenges related to sulfuric acid, affecting supply.
• The company had to realign its supply sources due to decreased production expectations at JV Inkai, impacting committed purchases.
• The transportation of uranium from Inkai has been delayed due to the use of the Trans-Caspian corridor, which is less predictable than the traditional Russian route.

Q & A Highlights

Q: With respect to long-term contracting, is there a shift in buying behavior towards upstream procurement due to the fulfillment of downstream markets? A: Yes, there is a shift. Utilities are starting to focus on upstream procurement as the enrichment and conversion markets are getting crowded. This is a result of the ongoing geopolitical situation, particularly the Russian invasion of Ukraine, which has caused a crisis in the market. (Timothy Gitzel, President, CEO, Director)

Q: Regarding Westinghouse's long-term EBITDA growth rate of 6% to 10%, how are you addressing this given the market dynamics? A: We are maintaining the 6% to 10% growth rate. There are significant tailwinds in the nuclear industry, and Westinghouse is well-positioned to benefit from these. We consider this a conservative outlook and will adjust it as major projects reach final investment decisions. (Grant Isaac, CFO, EVP)

Q: Given the uncertainties at Inkai, how are you considering your Tier 2 asset base and potential inorganic growth opportunities? A: We are committed to the JV Inkai project despite current challenges. Our focus remains on Tier 1 assets like McArthur River and Key Lake. We are not yet moving to Tier 2 assets, which are on care and maintenance, but they are ready to be activated when needed. (Timothy Gitzel, President, CEO, Director)

Q: What are your thoughts on the potential restart of the Springfield asset in the conversion segment? A: Springfield is a strategic asset, and its restart requires a solid industrial plan and stronger contracting cycles. We are strategically patient and disciplined, waiting for the right market conditions to leverage Springfield's potential. (Grant Isaac, CFO, EVP)

Q: How do you view the recent U.S. government pushback on nuclear power for data centers, and what are your thoughts on new nuclear builds in the U.S.? A: The pushback is seen as a signal for hyperscalers to co-invest in new capacity rather than relying on existing grids. This aligns with announcements for new capacity and supports the role of nuclear power, particularly the AP1000, in meeting future demand. (Grant Isaac, CFO, EVP)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.