National Atomic Company Kazatomprom JSC (KZAP) Q2 2024 earnings summary

Executive summary

• CFO Sultan Temirbayev resigned, with Marat Tulebayev, who has extensive internal and external experience, expected to assume the role pending corporate approval.

• Revenue rose 13% year-over-year to KZT 701.1 billion, with net profit up 27% to KZT 283.2 billion, driven by higher uranium prices and increased demand for enriched uranium products.

• Emphasized the growing importance of nuclear energy and the company's role in the global energy transition.

• Strategic moves included new production and exploration licenses and addressing uranium supply-demand imbalances.

• Reaffirmed commitment to operational sustainability, transparency, and fulfilling sales commitments despite production adjustments.

Financial highlights

• Group consolidated revenue reached KZT 701.1 billion (+13% YoY); net profit rose 27% to KZT 283.2 billion; adjusted EBITDA increased 14% to KZT 377.0 billion.

• Operating profit declined 10% to KZT 226.7 billion due to a 38% increase in cost of sales, mainly from higher uranium purchase costs.

• C1 cash costs and all-in sustaining cash costs increased by 38% and 45%, respectively, due to higher MET tax and sulfuric acid costs.

• Capital expenditures rose 64% YoY, driven by well field development and higher material costs.

• 2023 dividend payment totaled KZT 315 billion, over 50% higher than the previous year, with industry-leading yield.

Outlook and guidance

• 2025 production guidance revised to 25,000–26,500 tU, about 12% growth over 2024, due to sulfuric acid supply uncertainty and JV Budenovskoye delays.

• 2024 production guidance increased to 22,500–23,500 tU (100% basis), with attributable production at 11,600–12,600 tU.

• 2024 CapEx estimates adjusted upward to KZT 260–280 billion; excess production to replenish inventories.

• No changes to 2024 sales guidance; inventory levels expected to be sufficient by year-end.

• MET rate for uranium to rise to 9% in 2025, with a differentiated approach from 2026.