Cameco (CCO) Q2 2024 earnings summary

Executive summary

• Global nuclear energy demand is rising, driven by decarbonization, electrification, energy security, and net-zero commitments from over 140 countries and 9,000 businesses, with strong bipartisan support and renewed government and industry interest.

• The company is executing a disciplined strategy, leveraging tier-one assets, aligning production with contract portfolios, and focusing on operational excellence, flexibility, and sustainability.

• Q2 2024 operational performance was strong, supporting the full-year outlook and reflecting a transition to tier-one economics.

• Geopolitical uncertainty and energy security concerns are leading to new and renewed commitments to nuclear power, including life extensions for existing reactors.

• Westinghouse acquisition continues to impact results through purchase accounting and non-operational costs.

Financial highlights

• Q2 2024 revenue rose 24% year-over-year to $598M, with gross profit up 59% to $175M; H1 2024 revenue was $1.23B (+5%), gross profit $362M (+31%).

• Net earnings for Q2 were $36M (vs $14M in Q2 2023); adjusted net earnings $62M (vs -$3M); adjusted EBITDA for Q2 was $337M, up from $54M a year ago.

• Liquidity as of June 30, 2024: $362M in cash and $1B undrawn credit facility; total debt $1.4B, investment-grade ratings (S&P: BBB-, DBRS: BBB).

• Repayment of $100M on the Westinghouse term loan and refinancing of $500M in senior unsecured debentures, new maturity May 2031 at 4.94%.

• Westinghouse investment performing as expected, with 2024 adjusted EBITDA guidance of $445–510M and anticipated 6–10% CAGR over five years.

Outlook and guidance

• 2024 consolidated revenue expected between $2.85B and $3.0B, with strong cash flow generation and continued focus on debt reduction.

• Uranium deliveries for 2024 expected between 32M–34M lbs; fuel services production guidance 13.5M–14.5M kgU.

• UF6 production target at Port Hope reduced to 11,000–11,500 tons for 2024 due to operational issues, but overall fuel services guidance unchanged.

• Inkai production in Kazakhstan targeted at 8.3M lbs for 2024, contingent on sulfuric acid availability and subject to new tax regime impacts.

• Plan to file a new base shelf prospectus upon expiry of the current one in October 2024.