Interim woes for Urenco but focus will be on second half improvement

Urenco, the Cheshire-based uranium processing specialist, reported half year results today that were lower than the previous year, but in line with expectations.

During the six months to June 30, 2024, revenues fell from €703m to €649.3m, although Urenco points out that deliveries are typically more weighted towards the second half of the year.

EBITDA of €209.1m was lower than the first half of 2023, at €298.5m, driven primarily by lower customer deliveries of enrichment and uranium volumes and higher operating expenses, as well as a higher headcount and inflationary pressures.

Net income, at €800,000, against €32.7m, was largely due to decreased EBITDA.

Cash generated from operating activities during the period was impacted by lower customer deliveries combined with increased operating expenses and working capital movements, as the business repositions itself for growth. The figures showed a deficit of €105,5m compared with a surplus of €268.5m the previous year.

Net cash was €592.4m at the end of June 2024, seasonally down €439.8m from December 31, 2023 (€1.032.2bn).

The order book continues to grow and is now at €16.2bn, a 10.2% increase since the start of the year.

During the reporting period the company also announced the construction of a Urenco Advanced Fuels Facility at its Capenhurst site, jointly funded with the UK Government.

Urenco said an increasing acceptance of the role nuclear has to play in mitigating climate change, combined with geopolitical developments which have brought domestic energy security to the forefront, are positively impacting on several government policies for the nuclear industry.

The ‘Prohibiting Russian Uranium Imports Act’ passed by the US Congress, has provided confidence and clarity to the market, creating the opportunity for further investment in new nuclear fuel cycle facilities for current and advanced reactors. Similar discussions continue in Europe, where there have also been positive signals on future commitment to nuclear energy. 

The company said the market remains encouraging. SWU (enrichment) spot prices are increasing, as reported by UxC, from $159/SWU at the end of 2023 to $174/SWU in June 2024.

Urenco is extending existing contracts and signing new ones, such as with the nuclear operators in North America, Asia and Europe, maintaining and expanding its customer base.

This also applies to the advanced fuels market, where the company will be making its first delivery in 2025.

It says it has good visibility on future cash flows through the long term nature of its order book.

Extending to the 2040s, its order book value, as of June 30, 2024 is €16.2bn.

Chief executive, Boris Schucht, said: “Urenco’s half year results for 2024 are lower than in 2023, although in line with expectations.

“Our capital expenditure plan is progressing at pace with confirmed capacity investments of 1.8 million SWU in total.

“The first new centrifuges will come online in 2025. In the six months to June this year, we broke ground on the capacity extension in Almelo, the Netherlands, and committed to additional new centrifuges being installed in Gronau, Germany.

“These developments will keep our capacity stable to ensure we can continue to meet customer requirements in the mid and long term.”

He added: “As a result of more supportive government policies and longer term customer orders at sustainable pricing levels, we intend to further expand capacity at our US site.

“Our work on next generation fuels also gained momentum this half year, with the UK Government having agreed to co-fund a civil advanced fuels facility at our site in Capenhurst.

“This facility will produce high-assay low enriched uranium (HALEU) which is a critical resource needed by next-generation reactor developers in North America and Europe.

“We are also continuing to work closely with the US Department of Energy, which is looking to develop a supply of advanced fuels.”

He said the company has also launched a solar park installation at its German site, which could supply the equivalent of around 1,400 four-person households with electricity.