Cameco turns profit as market improves

SASKATOON The world’s largest uranium producer is reporting a $28-million quarterly profit following a “marked improvement” in the global market for nuclear fuel, with spot prices up 40 per cent compared to last year.

However, Cameco Corp. says there is still a need for caution because nuclear utilities have not returned to “meaningful” long-term contract purchasing and prices are not high enough to restart shuttered mines.

“The uranium market is showing a marked improvement compared to a year ago, in fact relative to the first half of the year, but there is still a long way to go,” Cameco CEO Tim Gitzel said in a statement.

Cameco, which has been struggling amid what Gitzel has called the toughest market he has ever seen, on Friday reported earning $28 million on revenues totalling $488 million in the third quarter.

Following a secondquarter loss, the company ’s year-to-date earnings now stand at $6 million on revenues totalling $1.3 billion. By comparison, the company was $143 million in the red over the same period last year.

Cameco finished 2017 with an annual loss of $205 million.

The company’s struggles are a result of a “persistently weak” global uranium market, which has been oversupplied since the 2011 Fukushima Daiichi nuclear disaster drastically reduced the number of operational reactors.

Cameco has responded by closing two mines and a mill in northern Saskatchewan, resulting in hundreds of layoffs, and making deep cuts at its corporate headquarters in Saskatoon.

The company paid out $27 million in severances over the third quarter, according to corporate filings.

While Cameco cautioned Friday that while “sequestered” uranium could find its way back to the market and create another glut, there are reasons to be optimistic over the long term, including “steady reactor growth” driving demand.