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Cameco reports 31% lower earnings in the second quarter

Last updated: 21:30 31 Jul 2015 BST, First published: 19:30 31 Jul 2015 BST

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Cameco’s CEO, Tim Gitzel, said that the company continued to deliver a good performance, despite difficult market conditions

Cameco (TSE:CCO) reported earnings of C$88 million for its most recent quarter, down 31% from the $127 million achieved in the same period a year earlier.

Cameco, which owns the world’s largest uranium mine at McArthur River, Saskatchewan, announced 22 cents per share in the second quarter, almost 30% lower than the 32 cents per share reported last year.

But, revenue was higher, totaling C$565 million, compared to revenues of C$502 million in the second quarter of last year. But, in volume, Cameco’s uranium sales volume dropped to 7.3 million pounds from 7.4 million pounds a year earlier.

On an adjusted basis, the company earned a profit of $46 million, or 12 cents per share, down from the $ 79 million, or 20 cents per share, a year ago. Its average realized uranium price rose only 1 per cent to $46.57 a pound, and average unit cost of sales rose 14 per cent to $40.71 a pound.

Cameco attributed the earnings drop to increased administrative costs and the attribution to last year’s results of a $28 million charge related to a settlement in a conflict over the long supply term with a public utility service.

These changes were partially offset by higher gross margins segments of uranium and fuel services, and settlement costs related to the early redemption of certain debentures.

Cameco’s CEO, Tim Gitzel, said that the company continued to deliver a good performance, despite difficult market conditions. He recalled in particular that prices and demand remained stable due to the oversupply prevailing on the market.

"Nevertheless, the long term prospects for nuclear energy, supported by good fundamentals remain positive," said Gitzel in a statement.

Cameco, which owns the world’s largest uranium producing mine at McArthur River, Sask., reiterated its forecast for total uranium output of 25.3 million to 26.3 million pounds in 2015.

In April, Cameco secured a deal in to supply 7.1 million pounds of uranium concentrate to India over the next five years.

Cameco was trading 1 percent higher in Toronto this afternoon at C$18.02/share.

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