Cameco operating profit down despite higher output
Wednesday, 04 Nov 2009
Reuters reported that Cameco Corporation’s Q3 operating profit fell 18.1% due to lower uranium sales and higher production costs and despite stronger production of the nuclear fuel.
Excluding one time items, the company posted earnings of CAD 104 million or 26 Canadian cents a share down from CAD 127 million or 37 Canadian cents per share.
The result put mild pressure on the company's shares, which were down 1.5% at CAD 29.59 on the Toronto Stock Exchange, versus a slight rise in the TSX materials sector.
On a net basis, profit rose to CAD 172 million from CAD 135 million helped by CAD 101 million gain on financial instruments, partially offset by CAD 33 million restructuring charge. Quarterly revenue fell 4.8% to CAD 694 million as the cost of selling uranium climbed 26% from a year earlier while sales volumes fell by 15%.
The weaker sales were due to deliveries timed at the discretion of customers and contrasted with production that doubled to 5.6 million pounds, which Mr George Topping analyst of Blackmont Capital said was higher than the 5.1 million pounds he had expected.
Mr Topping said that "This appears to be a strong operational quarter. The higher cost of sales stemmed from purchases of uranium at higher than production prices for resale.
