Fukushima haunts Cameco
Shares sink five per cent in Toronto
VANCOUVER – Cameco Corp., the world’s third-largest uranium miner, dropped the most in almost a year in Toronto after cutting its 2018 production target by 10 per cent.
Cameco fell 97 cents or 5.01 per cent to close at $18.40, after earlier declining 7.5 per cent, the most intraday since Nov. 7, 2011. The shares are little changed this year.
“Market uncertainty in the near term led us to review and adjust our growth plans,” Cameco chief executive Tim Gitzel said Thursday in a statement. “We decided to focus on advancing projects with the greatest certainty in the near term, from which we expect to achieve about 36 million pounds of annual supply by 2018 compared to the 40 million previously targeted.”
Uranium spot prices have slumped since the March 11, 2011, the earthquake and tsunami led to a meltdown at Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear power plant. In response, Japan suspended its fleet of nuclear power plants.
“Everyone I’m talking to is focusing on the 2018 forecast cut, though some people were thinking it could have been cut to as low as 30 million,” Rob Chang, an analyst at Cantor Fitzgerald LP, said.
Cameco, based in Saskatoon, reaffirmed its 2012 forecast for uranium output of 21.7 million pounds, according to the statement.
Net income in the third quarter more than doubled to $81.6 million, or 21 cents a share, from $39.1 million, or 10 cents, Cameco said on its website. Profit excluding gains on derivatives and other one-time items was 13 cents a share, missing the 26-cent average of 13 analysts’ estimates compiled by Bloomberg.
Sales dropped 23 per cent to $408 million.
Cameco was the third-largest uranium miner last year after Kazatomprom, Kazakhstan’s state-owned producer, and Paris-based Areva SA, according to the World Nuclear Association.