Cameco reports fourth quarter and 2016 financial results
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TSX: CCO website: cameco.com
NYSE: CCJ currency: Cdn (unless noted)
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Cameco reports fourth quarter and 2016 financial results
Saskatoon, Saskatchewan, Canada, February 9, 2017 . . . . . . . . . . . . . . . . .
Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the fourth quarter and
year ended December 31, 2016 in accordance with International Financial Reporting Standards (IFRS).
“The past year proved to be another difficult period for the uranium market,” said president and CEO, Tim Gitzel. “However,
despite the uranium spot price hitting a 12-year low, the performance of our core business – uranium – was solid, and in line
with our outlook.”
“Our uranium segment remained strong and drove over 90% of our 2016 gross profit, although our earnings reflect the
consequences of a weak uranium market and our resolve to take the necessary steps to strengthen our core business. While
we expect those steps to benefit our performance over time, they involved up-front costs, which impacted our results. In the
current market environment, it can be difficult to see beyond the weakness that has persisted for almost six years. However,
as we look to the future, we see continued growth in reactor construction and, consequently, increasing uranium demand. We
believe that with our focus on value and our tier-one assets, we are well positioned to seize that demand.”
Summary of 2016 results and developments:
Net loss of $62 million largely due to impairment charges of $362 million; adjusted net earnings $143 million:
Strategic changes and market weakness impacted our 2016 financial results:
We recognized an impairment charge for the full carrying value of Rabbit Lake ($124 million –second quarter) and the
full carrying value of our interest in Kintyre ($238 million – fourth quarter).
We incurred costs related to the suspension of production at our Rabbit Lake operation, curtailment of production at
Cameco Resources’ US ISR operations and the corresponding reduction of the workforce at these sites and at our
corporate office.
Core uranium business continued to outperform market: We delivered on our annual outlook with an average realized
price in our uranium segment that was 60% higher than the average spot price for the year.
Contract portfolio optimization: We continue to work with certain customers to optimize the value of our existing contract
portfolio, converting their future uncertainty to present value where it was beneficial to us, resulting in the cancellation of two
contracts during the third quarter for financial gains of $59 million, reflected as other income.
Tier-one focus: We continued to focus on lowering our costs and improving efficiency amid difficult uranium market
conditions. Our 2016 cash cost per pound decreased and annual production totalled 27 million pounds—5% higher than our
guidance as a result of Cigar Lake exceeding expectations.
2016 JV Inkai Restructuring Agreement: We signed an agreement with our partner Kazatomprom and JV Inkai to
restructure and enhance JV Inkai. Upon closing, we expect the new agreement to strengthen and extend our partnership
with another global leader in uranium mining.
Also of note:
TEPCO contract termination: On February 1, 2017, we announced that on January 31, 2017, Tokyo Electric Power
Company Holdings Inc. (TEPCO), alleging force majeure, confirmed that it would not withdraw a contract termination notice
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The 2018 date for the announcement of our fourth quarter and 2017 consolidated financial and operating results will be
provided in our 2017 third quarter MD&A. Announcement dates are subject to change.
Profile
We are one of the world’s largest uranium producers, a significant supplier of conversion services and one of two CANDU fuel
manufacturers in Canada. Our competitive position is based on our controlling ownership of the world’s largest high-grade
reserves and low-cost operations. Our uranium products are used to generate clean electricity in nuclear power plants around
the world. We also explore for uranium in the Americas, Australia and Asia. Our shares trade on the Toronto and New York
stock exchanges. Our head office is in Saskatoon, Saskatchewan.
As used in this news release, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its
subsidiaries; including NUKEM Energy GmbH, unless otherwise indicated.
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Investor inquiries: Rachelle Girard (306) 956-6403
Media inquiries: Gord Struthers (306) 956-6593