Cameco Q2 Profit Up; Raises FY09 Revenue Growth View

8/12/2009 11:07 AM ET

(RTTNews) - Canadian nuclear energy company Cameco Corp. (CCO.TO: News ,CCJ: News ) Wednesday reported higher profit for the second quarter, driven by revenue growth. The company also lifted its revenue outlook for fiscal 2009.

The company's second quarter net earnings were C$247 million or C$0.63 per share, compared with C$150 million or C$0.42 per share last year.

On an adjusted basis, net earnings rose 1% to C$140 million or C$0.36 per share from C$139 million, or C$0.39 per share in the year-ago quarter.

Cameco reported second-quarter revenue of C$774 million, up from C$620 million in the corresponding period a year ago.

The company's revenue from the uranium business increased by C$114 million to C$443 million due to a 35% increase in reported sales volumes and a marginal increase in the realized selling price. The increase in the average realized price was related to higher prices under fixed-price contracts and a more favorable foreign exchange rate being offset by lower realized prices under market-related contracts, Cameco noted.

The company also said that its gold business was impacted by lower gold production and higher operating costs during the quarter. In the electricity business, realized price was higher, largely due to revenue recognized by BPLP under its agreement with the Ontario Power Authority, or OPA.

Further, Cameco said that its fuel services business was positively impacted by 16% higher realized prices and a 32% increase in sales volumes. Fuel services revenue grew to C$82 million from C$54 million a year ago.

For the first half of fiscal 2009, Cameco reported net earnings of C$329 million, or C$0.85 per share, up from C$284 million or C$0.79 per share in the first half of 2008. Revenue rose 15% to C$1.39 billion from C$1.21 billion in the same period last year.

Going ahead, the company now expects a 5% to 10% increase in its fiscal 2009 revenue over 2008 compared to the company's previous estimate indicating it would be similar to 2008.

In 2009, reported uranium sales volumes are expected to total 34 million to 36 million pounds U3O8, compared with 32 million to 34 million pounds previously reported due to new commitments entered into with deliveries in 2009. As a result, Cameco now expects uranium revenue for 2009 to increase by 5% to 10% over 2008 compared with its previous estimate that revenue would decrease 2% to 5%.

The company's electricity revenue in 2009 is expected to increase 10% to 15% over 2008 compared to a 5% to 10% decrease previously reported. Centerra now expects its 2009 production to total between 680,000 and 730,000 ounces compared to its previous estimate of 720,000 to 770,000 ounces.