(MENAFN- ProactiveInvestors) (TSE:CCO) (NYSE:CCJ) a Canadian uranium producer reported a better-than-expected 14 percent jump in fourth-quarter profit fueled by higher uranium prices and lower costs.
Net income rose to C$73 million or C$0.18 per share in the October-to-December quarter from C$64 million or C$0.16 per share in the year-earlier period the Saskatoon Saskatchewan-based company said in a statement on February 6.
Adjusted earnings jumped 37 percent to C$205 million or C$0.52 per share topping the C$0.29 average estimate of 11 analysts polled by Capital IQ.
Revenue fell to C$899 million from C$977 million but came ahead of market expectations of C$782 million.
’s U.S.-listed shares rose as much as 1% to $15.22 in New York premarket trades.
The company ascribed the improved performance to higher average realized prices for uranium and a lower average cost of sales along with a favourable $37 million settlement involving a dispute over a long-term supply contract.
It also reported lower exploration expenditures and a higher income tax recovery than in the prior-year period.
“The uncertainty in the uranium market has persisted for longer than expected but 2014 was another year of strong financial and operational performance” chief executive officer Tim Gitzel said in the statement.
“And when we look longer term we continue to see exceptional growth on the horizon as billions of dollars are being invested in reactor construction around the world – reactors that will need uranium.”
said it expects consolidated revenue to decrease up to 5 percent in 2015 due to an expected decrease in uranium and fuel services sales volumes.
The company expects administration costs to be up to 5 percent higher compared to 2014.
is also anticipating to produce 25.3 million to 26.3 million pounds in 2015 and has commitments under long-term contracts to purchase approximately 2 million pounds.
The company expects uranium sales to range from 31 million to 33 million pounds in 2015 compared with 33.9 million pounds produced in 2014.
Following the results Cantor Fitzgerald maintained its “buy” rating and $28.55 target price on the uranium producer noting a solid beat in the quarter on the back of higher than forecast price realization and greater-than-expected uranium sales.
It said ’s average realized pricing was impressive. For the quarter averaged US$50.87/lb. Cantor Fitzgerald estimated US$46.88/lb while the spot’s average was US$37.86/lb. In Canadian dollar terms the average realized price for the quarter totalled C$56.78/lb. as compared to C$49.83/lb in the prior quarter reflecting the strength in the positive move in CAD/USD currency effects during the quarter. noted that the realized foreign exchange rate for the quarter was $1.12 versus $1.04 in the prior year quarter.
The 2011 Fukushima meltdown in Japan led to shutdowns of all of the country's nuclear reactors depressing the radioactive metal's price. The sector got a boost in late 2014 as Japan moved toward re-starting some reactors but the spot price has since pulled back to around $38 per lb as of February 5.
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