Cameco falls after reporting Q4 results, issuing 2024 guidance

Shares of Cameco declined about 7% on Thursday to close at $44.72 in New York trading and the stock is indicated down about another 1% to $44.35 in Friday pre-market trading after the company reported its consolidated financial and operating results for the fourth quarter and year ended December 31, 2023. Cameco reported Q4 revenue of $844M, up from $524M in the same quarter of the prior year, and reported Q4 net earnings of $80M along with adjusted net earnings of $90M. “Fourth quarter results are driven by normal quarterly variations in contract deliveries and the continued execution of our strategy. Our results include the addition of a new segment with the close of the acquisition of Westinghouse Electric Company in the fourth quarter,” the company stated. “Our 2023 financial performance benefitted from higher sales volumes and realized prices in our uranium and fuel services segments. Our net earnings, adjusted net earnings, and cash from operations all more than doubled compared to 2022, with adjusted EBITDA up 93%. In 2024, we expect strong financial performance as we begin to realize the benefits from our investment in Westinghouse. We plan to continue to transition to our tier-one cost structure and make the capital and other expenditures we believe are necessary to position the company for continued sustainable growth. Growth that will be sought in the same manner as we approach all aspects of our business; strategic, deliberate, disciplined, and with a focus on generating full-cycle value,” said Tim Gitzel, Cameco’s president and CEO. “With the improvements in the market, the new long-term contracts we have put in place, and a pipeline of contracting discussions, our plan is to produce 18 million pounds at each of McArthur River/Key Lake and Cigar Lake in 2024. We also plan to begin the work necessary to extend the estimated mine life at Cigar Lake to 2036. In addition, at McArthur River/Key Lake, we plan to undertake an evaluation of the work and investment necessary to expand production up to its annual licensed capacity of 25 million pounds, which we expect will allow us to take advantage of this opportunity when the time is right. Based on Kazatomprom’s announcement on February 1, 2024, production in Kazakhstan is expected to remain 20% below the level stipulated in subsoil use agreements, similar to in 2023, primarily due to the sulfuric acid shortage in the country. We are still in discussions with JV Inkai and KAP to determine how this may impact production at Inkai in 2024 and thereafter and therefore our corresponding purchase obligation. At our Port Hope conversion facility, we plan to produce between 13.5 million and 14.5 million kgU, including 12 million kgU of UF6 to satisfy our book of long-term business for conversion services and customer demand at a time when conversion prices are at historic highs. As a result of these plans, we expect strong financial performance in 2024, including cash flow generation. See Outlook for 2024 and Uranium – Tier-one operations in our 2023 annual MD&A,” the company added.