Urenco well positioned to serve nuclear market of the future

Uranium processing giant Urenco today announced figures for the half year to June 30, that showed a fall in revenues, but better pre-tax income.

Urenco UK is based at Capenhurst near Chester.

The business operates a Capenhurst plant producing enriched uranium to enable nuclear power stations around the world to generate electricity, and employs around 300 people.

For the half year period it saw revenues fall from £725.2m last year to £690m this year, while EBITDA of £441.5m was slightly ahead of last year’s £438.7m figure.

Income before tax, though, improved from £221.84m in 2017 to £229.26m this year.

The group’s contract order book stood at £10.86bn by June 30.

Earlier in June the UK Government announced funding for an Advanced Modular Reactor (AMR) programme involving Urenco, along with Birkenhead ship yard Cammell Laird and Manchester University.

Their U-Battery is a micro modular nuclear reactor being designed to provide secure, low carbon embedded power at industrial sites and remote locations, currently focused on the UK and Canadian markets.

Construction of a Tails Management Facility (TMF) at Capenhurst is also nearing completion.

During the uranium enrichment process, depleted uranium hexafluoride (UF6), or ‘tails’, are made as a by-product. The by-product contains 20-30% of the natural uranium 235 concentration and, therefore, has the potential for re-enrichment in the future.

The TMF facility will be able to recycle around 5,000 tonnes of hydrogen fluoride a year for industrial use. The TMF project is nearing completion, commissioning has commenced, with commercial operation anticipated to start in 2019.

Urenco Group chief executive Thomas Haeberle said today: “The half year results in 2018 reflect a strong operational performance and positive progress in the delivery of our strategic objectives, with support provided by our long-established contract order book.

“We have maintained our focus on safety performance and implemented initiatives to further enhance our safety culture.

“Revenue is down for the first six months of 2018 compared to half year 2017 driven by lower prices after currency hedges.

“EBITDA is slightly improved, reflecting lower revenues being more than offset by reduced costs.

“The phasing of revenue between the first and second half of 2018 is expected to be broadly similar to that in 2017, with the second half of the year predicted to account for the majority of sales.

“The continued challenging market conditions and pricing pressures are reflected in new contracts and, consequently, in the contract order book value that will be delivered in future periods.”

However, he added: “Global demand for a continuous and secure supply of low carbon energy provides the opportunity for growth in the nuclear industry.

“URENCO is well positioned to support this growth. However, the market needs a sustainable pricing structure to allow for the necessary investments so that, in the longer term, we can continue to supply the market from our diverse enrichment sites.”

He said the business is on track to realise £268m in cash savings by the end of 2019 resulting from the successful reduction of operating costs and capital spending.

“Our micro-modular U-Battery received funding from the UK Government. demonstrating U-Battery’s commercial and technical case in addressing energy and decarbonisation challenges in the UK and globally.

“The TMF project is nearing completion, commissioning has commenced, with commercial operation anticipated to start in 2019. Investment in this facility demonstrates our commitment to uranium stewardship by safely and responsibly managing depleted uranium.” he said.

Looking forward, the group believes Urenco is well positioned to serve the emerging marketplace.

“The global nuclear industry is expected to grow and new reactors are being built.

“Nuclear energy has an important role to play in meeting a growing demand for affordable electricity from reliable and low carbon sources to meet important climate change targets.

“Urenco is well positioned to support this growth and meet our customers’ changing needs through our portfolio of products and services, expertise and technology.”