Canadian Manufacturing

Cameco records third-quarter loss as uranium market remains oversupplied

Industry awaits Japanese reactor re-starts as it continues to tread water

SASKATOON—Uranium miner, Cameco Corp., has reported a $4 million, or 1 cent per share, loss for the third quarter of 2015, citing the continued impact of the oversupplied uranium market. The company recorded higher consolidated revenue against the same quarter last year, while it saw gross profit dip below the 2014 figure.

“Our results for the quarter and the first nine months are as expected with a higher proportion of our deliveries scheduled for the fourth quarter,” Tim Gitzel, president and CEO of Cameco, said.

The company said market condition continue to impact demand and price.

“While we can’t control the pace of industry recovery, we can ensure that our company is ready at each step along the way,” Gitzel added. “Our positive long-term view has not changed, so today that means preparing for the demand-driven market we see coming, by keeping our costs down and operating our mines safely and efficiently.”

The company pointed to its Cigar Lake mine in Saskatchewan as a strong example, noting it has already exceeded the company’s 2015 production target range.

“The Cigar Lake operation, along with our other world-class assets, are at the core of our strategy to enhance our operating leverage and maintain the flexibility needed to respond quickly as the market improves,” Gitzel said.

As the industry awaits a recovery, the company said nuclear reactor restarts in Japan remain an important driver of market sentiment in the short term. There have been several positive stories out of Japan recently, with Kyushu’s Sendai Unit 1 restarting in August and Unit 2 in mid-October. Cameco said three additional reactors have been given the regulatory green-light to restart, while 20 others await decisions.

“We remain confident that a significant number of units will be restarted in Japan over time, though the regulatory approval process and restart schedules are clearly hard to predict,” the company said.

Meanwhile, the company said “strong fundamentals” indicate a positive outlook for the industry.

“The 65 reactors under construction today and additional units planned over the next decade means increasing uranium demand as those reactors come online. As future supply continues to be negatively affected by current depressed market conditions, we expect to see a shift from the currently over-supplied market we are experiencing today to a demand-driven market that requires more primary supply,” Cameco said.

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