Cameco posts strong Q3 results, increases dividend

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Saskatoon-based uranium miner Cameco Corp. third-quarter revenues increased 25 per cent to $721 million, but its net earnings dipped to $7 million from $137 million due to delayed sales at its joint-venture mine in Kazakhstan and expenses related to its acquisition of nuclear power company Westinghouse Electric Co.

Despite the drop in profit, Cameco said its dividend will increase to 16 cents per share next year from 12 cents currently, in part due to the continued strengthening of the industry’s long-term prospects. It is also recommending the dividend increase to 24 cents per share from 2024 through 2026.

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Cameco had strong operational performance across all segments, but chief executive Tim Gitzel said it ran into some challenges at its overseas operations during the quarter ending Sept. 30, specifically the Inkai mine, of which it owns 49 per cent, in Kazakhstan, which had troubles meeting production goals due to issues acquiring necessary supplies.

“The decreased outlook at Inkai is primarily due to the ongoing challenges related to sulphuric acid in that part of the world,” he said on a call with analysts.

Due to these issues, Cameco is now projecting the Kazakhstan mine will produce 7.5 million pounds of uranium in 2024, down from its original forecast that called for more than eight million pounds.

Gitzel said acquiring sulphuric acid can be challenging because Cameco has opted not to purchase from the Russian companies that have traditionally supplied the mine. But he said the mine now has enough sulphuric acid to operate for the rest of the year.

“We remain committed to the JV Inkai project and the future of that,” he said.

Gitzel said Cameco’s facilities, specifically the ones at McArthur River and Key Lake in Saskatchewan, are some of the world’s best due in part due to their use of automated technologies, many of which were put in place while the facilities were in care and maintenance.

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McArthur River/Key Lake are in a good position to meet increased demand from the market, he said, since production at the mine has increased and is getting closer to 25 million pounds, which is the most the company is currently licensed to extract.

“We’re going to see how far we can push that without putting a big chunk of new capital into that,” he said.

Gitzel said the company is also in a good position to restart some of its smaller operations if market conditions provide for that.

“As we look into 2025, we expect continued strong performance from the uranium and fuel services segment, as well as continued growth from Westinghouse,” Mohamed Sidibé, an analyst at National Bank of Canada, said a note following Cameco’s earnings release.

Cameco is optimistic about Westinghouse’s future as countries around the world look for low-carbon power generation sources. Currently, Westinghouse, which Cameco owns 49 per cent of, is forecasted to experience growth of six per cent to 10 per cent over the next five years.

“Lots of excitement, lot of prospect for new builds,” Grant Isaac, Cameco’s executive vice-president and chief financial officer, said on the call.

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He said Cameco is currently holding steady on its projections for Westinghouse while waiting on more firm commitments in regards to new reactor builds before looking to revise the rate of growth upwards.

“We think that remains a very conservative outlook,” he said.

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