Cameco reports Q1 results: 2024 outlook remains solid; financial discipline and strong cash position result in focused debt reduction; operationally, segments performing to plan; attributes of baseload nuclear power attracting tech sector investment
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TSX: CCO website: cameco.com
NYSE: CCJ currency: Cdn (unless noted)
2121 – 11th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada
Tel: 306-956-6200 Fax: 306-956-6201
Cameco reports Q1 results: 2024 outlook remains solid; financial discipline and strong cash
position result in focused debt reduction; operationally, segments performing to plan; attributes
of baseload nuclear power attracting tech sector investment
Saskatoon, Saskatchewan, Canada, April 30, 2024 . . . . . . . . . . . . . . . .
Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the first quarter ended
March 31, 2024, in accordance with International Financial Reporting Standards (IFRS).
“In the first quarter operational performance was strong across our uranium, fuel services and Westinghouse segments.
Financial results are in line with the 2024 outlook we provided, which has not changed, and are as expected, reflecting normal
quarterly variability and the required purchase accounting and other non-operational acquisition-related costs for
Westinghouse,” said Tim Gitzel, Cameco’s president and CEO.
“Our strategy continues to demonstrate the benefits of aligning our operational, marketing, and financially focused decisions in
a market where we are seeing sustained, positive momentum for nuclear energy like never before. We remain in the enviable
position of having what we believe are the world’s premier, tier-one assets operating in stable geopolitical regions, along with
our investments across the fuel cycle and reactor life cycle. That includes our investment in Westinghouse, where we are
seeing its long-term business prospects continue to improve. With our position as a proven, reliable supplier operating across
the nuclear fuel cycle, our customers recognize our deep understanding of how nuclear fuel markets work, and global
policymakers are turning to us as thought leaders in the industry.
“Operationally, production results in the first quarter were strong and are on track with our 2024 plans, with production rates
and total production costs in our uranium segment continuing to reflect the transition back to our tier-one cost structure. In the
market, we continued to be selective in committing our unencumbered, tier-one, in-ground uranium inventory and UF6
conversion capacity, building on a contract portfolio that spans more than a decade by successfully layering in additional long-
term contracts, increasing our annual commitments to an average of about 28 million pounds per year from 2024 through
2028. Every contract we add reflects the sentiment and dynamics in the market at the time it is negotiated, allowing us to
capture greater upside and creating value over the lifetime of the contract. From a risk-managed financial perspective, our
resulting expectation of strong cash flow generation is guiding our conservative capital allocation priorities in 2024, with
focused debt reduction and prudent refinancing plans.
“Full-cycle support for nuclear energy and the required uranium fuel continues to grow, with increasing public support, positive
policy decisions, and market-based solutions underpinning the positive fundamentals and durable long-term demand story for
nuclear. The inaugural Nuclear Energy Summit took place in Brussels in March, with representatives from 32 countries joining
forces to back supportive measures in areas including financing, regulatory cooperation, technological innovation, and
workforce training, enabling the expansion of nuclear power to help address climate change and boost energy security.
“The benefits of nuclear energy as a critical tool in the fight against climate change and the advantage nuclear provides in the
context of energy security are not only being recognized and highlighted by governments around the world, but by energy-
intensive industries that are advancing faster than policymakers to effectively transition to energy sources that provide clean,
constant and reliable power. An increase in public support from tech sector leaders and announcements like the recent
acquisition of a 960 MW data centre campus by Amazon Web Services, with a related long-term agreement to secure reliable
power from Talen’s Energy Corporation’s Susquehanna nuclear power plant, are indicative of that industrial focus.
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“The geopolitical events that have been amplifying global supply chain and transportation risks are continuing to have a
significant impact on nuclear fuel customer procurement strategies. Utilities are adjusting their supply chains to ensure reliable
supply, with increasing competition to secure long-term contracts for uranium products and services. We expect that Cameco
and Westinghouse, as proven producers of uranium products and services and having demonstrated strong and sustainable
performance, can be expected to benefit from the significant tailwinds associated with having licensed and permitted
operations in geopolitically stable jurisdictions.
“We are a responsible, commercial supplier with a strong balance sheet, long-lived, tier-one assets, and a proven operating
track record. We are invested across the nuclear fuel cycle and believe we have the right strategy to achieve our vision of
‘energizing a clean-air world’ and do so in a manner that reflects our values. Embedded in our decisions is a commitment to
address the risks and opportunities that we believe will make our business sustainable over the long term.”
2024 outlook remains solid: We are tracking well towards achieving the 2024 outlook provided in our 2023 annual MD&A.
We continue to expect strong cash flow generation, with estimated consolidated revenue of between about $2.9 billion and
$3.0 billion. We maintain the outlook for our share of Westinghouse’s 2024 adjusted EBITDA of between $445 million and
$510 million. See Outlook for 2024 in our first quarter MD&A for more information. Adjusted EBITDA attributable to
Westinghouse is a non-IFRS measure, see page 5.
Q1 net losses of $7 million; adjusted net earnings of $56 million; adjusted EBITDA $345 million: Results are driven
by normal quarterly variations in contract deliveries in our uranium and fuel services segments, and the addition of
Westinghouse. Performance in our core uranium segment was strong with net earnings up by 34% and adjusted EBITDA
up by 16% compared to the same period in 2023 largely due to an increase of 27% in the Canadian dollar average realized
price partially offset by the expected lower deliveries and higher cost of sales. See Financial results by segment – Uranium
in our first quarter MD&A for more information. However, as indicated in our 2023 annual MD&A, Westinghouse is expected
to generate a net loss of between $170 million and $230 million in 2024 due to the impact of the purchase accounting,
which requires the revaluation of Westinghouse’s inventory and other assets at the time of acquisition, and the expensing of
some non-operating acquisition-related transition costs. Of the expected net loss for Westinghouse in 2024, $123 million
was incurred in the first quarter due to normal variability in the timing of its customer requirements and delivery and outage
schedules. Westinghouse’s first quarter is typically its weakest, with stronger expected performance in the second half of
the year, and higher expected cash flows in the fourth quarter. We do not believe the impact of the revaluation of
Westinghouse’s inventory and assets, or the non-operating acquisition-related transition costs reflect its underlying
performance for the reporting period, therefore, we use adjusted EBITDA as a performance measure for Westinghouse,
which was $77 million for the first quarter. See Our earnings from Westinghouse in our first quarter MD&A for more
information. Adjusted net earnings and adjusted EBITDA are non-IFRS measures, see information starting on page 5.
Strong production performance in the uranium segment: In our uranium segment we produced 5.8 million pounds (our
share) during the quarter, an increase from the 4.5 million pounds (our share) of production in the same period of 2023. As
a result of increased production, the unit cash cost of production was $19.52 per pound, a 16% reduction compared to the
same period in 2023. The unit cost of sales was up 15% primarily due to the impact of higher cost purchases on the
inventory value, including Inkai purchases. The cash impact of higher cost Inkai purchases on average unit cost of sales is
partially offset by the dividends we receive from Joint Venture Inkai (JV Inkai). With our mining operations performing well
and Key Lake running at planned production rates, we continue to expect 18 million pounds of production (100% basis) at
each of McArthur River/Key Lake and Cigar Lake operations in 2024. See Our operations – uranium production overview in
our first quarter MD&A for more information. We continue to plan our production to align with our contract portfolio and
customer needs, as well as evaluate the optimal mix of production, inventory and purchases in order to retain the flexibility
to deliver long-term value. Cash cost per pound is a non-IFRS measure, see page 5.
Disciplined long-term contracting continues, maintaining exposure to higher prices: As of March 31, 2024, we had
commitments requiring delivery of an average of about 28 million pounds per year from 2024 through 2028, with
commitment levels in 2024 and 2025 higher than the average and in 2026 through 2028 lower than the average. As the
market further improves, we expect to continue to layer in volumes capturing greater upside using market-related pricing
mechanisms. We also have contracts in our uranium and fuel services segments that span more than a decade, and in our
uranium segment, many of those contracts benefit from market-related pricing mechanisms. In addition, we have a large
and growing pipeline of business under discussion, which we expect will help further build our long-term contract portfolio.
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Maintaining financial discipline and balanced liquidity to execute on strategy:
Strong balance sheet: As of March 31, 2024, we had $323 million in cash and cash equivalents and $1.5 billion in
total debt. In addition, we have a $1.0 billion undrawn credit facility which matures October 1, 2027. With improving
prices under our long-term contract portfolio, the progress we are making in our uranium segment towards the return
to our tier-one cost structure, and an expected increase in our UF6 conversion production, we expect to see strong
cash flow generation in 2024.
Focused debt reduction: Thanks to our risk-managed financial discipline, and strong cash position, in the first
quarter we prioritized the reduction of the $600 million (US) floating-rate term loan used to finance the Westinghouse
acquisition, repaying $200 million (US) of the principal. We plan to continue to prioritize repayment of the remaining
$400 million (US) outstanding principal on the term loan while balancing our liquidity and cash position.
Prudent refinancing plans: Consistent with the conservative financial management we have demonstrated and our
2024 capital allocation priorities, in the second quarter, we expect to refinance the $500 million senior unsecured
debenture we have maturing on June 24, 2024, prior to maturity or when it comes due.
Received dividends from JV Inkai in April: Following the quarter end, we received a cash dividend of $129 million (US),
net of withholdings, from JV Inkai based on its 2023 financial performance. From a cash flow perspective, we expect to
realize the benefit from JV Inkai’s 2024 financial performance in 2025 once the dividend for 2024 is declared and paid.
JV Inkai shipments: The second shipment containing the remainder of our share of Inkai's 2023 production arrived in
February 2024. We continue to work closely with JV Inkai and our joint venture partner, Kazatomprom, to receive our share
of production via the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports. We
could experience delays to our expected Inkai deliveries this year if transportation using this shipping route takes longer
than anticipated. Inkai production was 1.6 million pounds (100% basis) for the quarter, compared to 1.9 million pounds
(100% basis) in the same period last year. Presently, JV Inkai is experiencing procurement and supply chain issues, most
notably, related to the availability of sulfuric acid. JV Inkai’s current production target for 2024 is 8.3 million pounds of U3O8
(100% basis). However, this target is tentative and contingent upon receipt of sufficient volumes of sulfuric acid. Our
allocation of the planned production from JV Inkai is currently under discussion. To mitigate the risk of transportation delays
or production shortfalls, we have inventory, long-term purchase agreements and loan arrangements in place we can draw
on.
Consolidated financial results
THREE MONTHS
HIGHLIGHTS ENDED MARCH 31
($ MILLIONS EXCEPT WHERE INDICATED) 2024 2023 CHANGE
Revenue 634 687 (8)%
Gross profit 187 167 12%
Net earnings (losses) attributable to equity holders (7) 119 >(100)%
$ per common share (basic) (0.02) 0.27 >(100)%
$ per common share (diluted) (0.02) 0.27 >(100)%
Adjusted net earnings (ANE) (non-IFRS, see page 5) 56 115 (51)%
$ per common share (adjusted and diluted) 0.13 0.27 (52)%
Adjusted EBITDA (non-IFRS, see page 5) 345 226 53%
Cash provided by operations (after working capital changes) 63 215 (71)%
The financial information presented for the three months ended March 31, 2023, and March 31, 2024, is unaudited.
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Selected segment highlights
THREE MONTHS
HIGHLIGHTS ENDED MARCH 31
($ MILLIONS EXCEPT WHERE INDICATED) 2024 2023 CHANGE
Uranium Production volume (million lbs) 5.8 4.5 29%
Sales volume (million lbs) 7.3 9.7 (25)%
Average realized price 1 ($US/lb) 57.57 45.35 27%
($Cdn/lb) 77.33 60.98 27%
Revenue 561 595 (6)%
Gross profit 169 137 23%
Net earnings attributable to equity holders 253 189 34%
Adjusted EBITDA 2 303 261 16%
Fuel services Production volume (million kgU) 3.7 4.1 (10)%
Sales volume (million kgU) 1.5 2.5 (40)%
Average realized price 3 ($Cdn/kgU) 48.36 37.66 28%
Revenue 72 92 (22)%
Net earnings attributable to equity holders 20 31 (35)%
Adjusted EBITDA 2 25 39 (36)%
Adjusted EBITDA margin (%) 2 35 42 (17)%
Westinghouse Revenue 656 - n/a
(our share) Net loss (123) - n/a
Adjusted EBITDA 2 77 - n/a
1 Uranium average realized price is calculated as the revenue from sales of uranium concentrate, transportation and storage fees divided by the volume of uranium
concentrates sold.
2 Non-IFRS measure, see page 5.
3 Fuel services average realized price is calculated as revenue from the sale of conversion and fabrication services, including fuel bundles and reactor
components, transportation and storage fees divided by the volumes sold.
The table below shows the costs of produced and purchased uranium incurred in the reporting periods (see non-IFRS
measures starting on page 5). These costs do not include care and maintenance costs, selling costs such as royalties,
transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.
THREE MONTHS
ENDED MARCH 31
($CDN/LB) 2024 2023 CHANGE
Produced
Cash cost 19.52 23.13 (16)%
Non-cash cost 9.79 10.82 (10)%
Total production cost 1 29.31 33.95 (14)%
Quantity produced (million lbs) 1 5.8 4.5 29%
Purchased
Cash cost 1 87.75 66.92 31%
Quantity purchased (million lbs) 1 2.6 0.4 >100%
Totals
Produced and purchased costs 47.40 36.64 29%
Quantities produced and purchased (million lbs) 8.4 4.9 71%
1 Due to equity accounting, our share of production from JV Inkai is shown as a purchase at the time of delivery. These purchases will fluctuate during the quarters
and timing of purchases will not match production. During the quarter, we purchased 1.1 million pounds from JV Inkai at a purchase price per pound of $129.96
($96.88 (US)). There were no purchases from JV Inkai in the first quarter of 2023.
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Non-IFRS measures
The non-IFRS measures referenced in this document are supplemental measures, which are used as indicators of our
financial performance. Management believes that these non-IFRS measures provide useful information to investors, securities
analysts, lenders and other interested parties in assessing our operational performance and our ability to generate cash flows
to meet our cash requirements. These measures are not recognized measures under IFRS, do not have standardized
meanings, and are therefore unlikely to be comparable to similarly-titled measures presented by other companies. Accordingly,
these measures should not be considered in isolation or as a substitute for the financial information reported under IFRS. The
following are the non-IFRS measures used in this document.
ADJUSTED NET EARNINGS
Adjusted net earnings is our net earnings attributable to equity holders, adjusted for non-operating or non-cash items such as
gains and losses on derivatives and adjustments to reclamation provisions flowing through other operating expenses that we
believe do not reflect the underlying financial performance for the reporting period. Other items may also be adjusted from time
to time. We also adjust this measure for certain of the items that our equity-accounted investees make in arriving at other non-
IFRS measures. Adjusted net earnings is one of the targets that we measure to form the basis for a portion of annual
employee and executive compensation (see Measuring our results in our 2023 annual MD&A).
In calculating ANE we adjust for derivatives. We do not use hedge accounting under IFRS and, therefore, we are required to
report gains and losses on all hedging activity, both for contracts that close in the period and those that remain outstanding at
the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of
the reporting period (mark-to-market). However, we do not believe the gains and losses that we are required to report under
IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect
the impact of our hedging program in the applicable reporting period. See Foreign exchange in our 2023 annual MD&A for
more information.
We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to
update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This
normally results in an adjustment to our asset retirement obligation asset in addition to the provision balance. When the assets
of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the
adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 10 of our interim
financial statements for more information. This amount has been excluded from our ANE measure.
As a result of the change in ownership of Westinghouse when it was acquired by Cameco and Brookfield, Westinghouse’s
inventories at the acquisition date were revalued based on the market price at that date. As these quantities are sold,
Westinghouse’s cost of products and services sold reflect these market values, regardless of Westinghouse’s historic costs.
Our share of these costs is included in earnings from equity-accounted investees and recorded in cost of products and
services sold in the investee information (see note 7 to the financial statements). Since this expense is non-cash, outside of
the normal course of business and only occurred due to the change in ownership, we have excluded our share from our ANE
measure.
Westinghouse has also expensed some non-operating acquisition-related transition costs that the acquiring parties agreed to
pay for, which resulted in a reduction in the purchase price paid. Our share of these costs is included in earnings from equity-
accounted investees and recorded in other expenses in the investee information (see note 7 to the financial statements). Since
this expense is outside of the normal course of business and only occurred due to the change in ownership, we have excluded
our share from our ANE measure.
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To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings
for the first quarter of 2024 and compares it to the same period in 2023.
THREE MONTHS
ENDED MARCH 31
($ MILLIONS) 2024 2023
Net earnings (losses) attributable to equity holders (7) 119
Adjustments
Adjustments on derivatives 33 (6)
Adjustments to earnings from equity-investees
Inventory purchase accounting (net of tax) 38 -
Acquisition-related transition costs (net of tax) 14 -
Adjustments to other operating income (15) (2)
Income taxes on adjustments (7) 4
Adjusted net earnings 56 115
The following table shows the drivers of the change in adjusted net earnings (non-IFRS measure, see above) in the first
quarter of 2024 compared to the same period in 2023.
THREE MONTHS
ENDED MARCH 31
($ MILLIONS) IFRS ADJUSTED
Net earnings – 2023 119 115
Change in gross profit by segment
(We calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A))
Uranium Impact from sales volume changes (35) (35)
Higher realized prices ($US) 119 119
Higher costs (52) (52)
Change – uranium 32 32
Fuel services Impact from sales volume changes (12) (12)
Higher realized prices ($Cdn) 16 16
Higher costs (16) (16)
Change – fuel services (12) (12)
Other changes
Lower administration expenditures 4 4
Higher exploration expenditures (1) (1)
Change in reclamation provisions 15 2
Lower earnings from equity-accounted investees (103) (51)
Change in gains or losses on derivatives (43) (4)
Change in foreign exchange gains or losses 19 19
Lower finance income (22) (22)
Change in income tax recovery or expense 5 (6)
Other (20) (20)
Net earnings (losses) – 2024 (7) 56
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EBITDA
EBITDA is defined as net earnings attributable to equity holders, adjusted for the costs related to the impact of the company’s
capital and tax structure including depreciation and amortization, finance income, finance costs (including accretion) and
income taxes.
ADJUSTED EBITDA
Adjusted EBITDA is defined as EBITDA adjusted for the impact of certain costs or benefits incurred in the period which are
either not indicative of the underlying business performance or that impact the ability to assess the operating performance of
the business. These adjustments include the amounts noted in the ANE definition.
In calculating adjusted EBITDA, we also adjust for items included in the results of our equity-accounted investees that are not
adjustments to arrive at our ANE measure. These items are reported as part of other expenses within the investee financial
information and are not representative of the underlying operations. These include gains/losses on undesignated hedges,
transaction, integration and restructuring costs related to acquisitions and gains/losses on disposition of a business.
The company may realize similar gains or incur similar expenditures in the future.
ADJUSTED EBITDA MARGIN
Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue for the appropriate period.
EBITDA, adjusted EBITDA and adjusted EBITDA margin are non-IFRS measures which allow us and other users to assess
results of operations from a management perspective without regard for our capital structure. To facilitate a better
understanding of these measures, the table below reconciles earnings before income taxes with EBITDA and adjusted
EBITDA for the first quarter of 2024 and 2023.
For the quarter ended March 31, 2024:
FUEL
($ MILLIONS) URANIUM SERVICES WESTINGHOUSE OTHER TOTAL
Net earnings (loss) attributable to equity holders 253 20 (123) (157) (7)
Depreciation and amortization 37 5 - 1 43
Finance income - - - (6) (6)
Finance costs - - - 38 38
Income taxes - - - 31 31
290 25 (123) (93) 99
Adjustments on equity investees
Depreciation and amortization 8 - 85 -
Finance income - - (2) -
Finance expense - - 64 -
Income taxes 20 - (37) -
Net adjustments on equity investees 28 - 110 - 138
EBITDA 318 25 (13) (93) 237
Gain on derivatives - - - 33 33
Other operating income (15) - - - (15)
303 25 (13) (60) 255
Adjustments on equity investees
Inventory purchase accounting - - 50 -
Acquisition-related transition costs - - 19 -
Other expenses - - 21 -
Net adjustments on equity investees - - 90 - 90
Adjusted EBITDA 303 25 77 (60) 345
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For the quarter ended March 31, 2023:
FUEL
($ MILLIONS) URANIUM SERVICES OTHER TOTAL
Net earnings (loss) attributable to equity holders 189 31 (101) 119
Depreciation and amortization 68 8 1 77
Finance income - - (28) (28)
Finance costs - - 24 24
Income taxes - - 36 36
257 39 (68) 228
Adjustments on equity investees
Depreciation and amortization 2 - - -
Income taxes 4 - - -
Net adjustments on equity investees 6 - - 6
EBITDA 263 39 (68) 234
Loss on derivatives - - (6) (6)
Other operating income (2) - - (2)
Adjusted EBITDA 261 39 (74) 226