UPDATE 3-Uranium One turns to profit on production, sales

Wed May 11, 2011 12:33pm EDT

* EPS $0.01 vs year-ago nil

* Sales volume more than doubles to 1.7 mln pounds

* Revenue up to record $101.9 million

* Shares slip 2.94 pct to C$3.96 on TSX (Adds CEO comments, details; in U.S. dollars unless noted)

TORONTO, May 11 (Reuters) - Uranium One UUU.TO rebounded to a first-quarter profit on Wednesday as revenue soared on a 33 percent increase in production and higher realized uranium prices.

While the Canadian uranium producer more than doubled its sales volume, selling 1.7 million pounds of uranium in the quarter, earnings came in below analyst expectations.

Despite the miss, the company said it is still on track for total uranium sales of 9.5 million pounds for the year.

"Our sales will be more heavily weighted to the second half of 2011," Chief Executive Chris Sattler said in conference call with investors. "This is due to the normal quarterly variability of contracted deliveries."

Uranium One's shares rose more than 2 percent on the Toronto Stock Exchange early Wednesday morning, but reversed course by midday and were down 2.94 percent at C$3.96.

In March, the shares fell more than 45 percent to a low of C$3.36 in the aftermath of the nuclear disaster at the Fukushima Daiichi plant in Japan.

Sattler said that while the long-term impact of Fukushima remains unknown, future uranium demand looks strong with China, India and Russia all maintaining their nuclear build plans.

Uranium One revised its outlook for China's nuclear rollout down slightly, as the country continues to review new permits.

"The previous expectation that we had for China in 2020 was to have about 90 gigawatts of nuclear power generating capacity," Sattler said. "I think you'll see them come out somewhere between 70 and 80 gigawatts of nuclear capacity by the end of the decade now."

RECORD QUARTER

Uranium One's earnings increased to $14 million, or 1 cent a share. That compared with a loss of $1.4 million, or nil a share, in the same period of 2010.

When adjusted to remove one-time items, earnings were $14.7 million, or 2 cents a share, compared with an adjusted loss of $10.5 million, or 2 cents a share.

Analysts, on average, had expected earnings of 5 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose to a quarterly record of $101.9 million from $35.5 million.

The uranium producer boosted quarterly production by 33 percent to 2.4 million pounds, while uranium sales more than doubled to 1.7 million pounds.

The average realized price for uranium rose to $61 a pound from $46 a pound in the first quarter of 2010. Total cash costs were down 22 percent at $14 a pound.

Uranium One maintained production guidance of 10.5 million pounds for the year.

($1=$0.96 Canadian) (Reporting by Julie Gordon; editing by Rob Wilson)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video