* Q3 adj EPS C$0.13 v C$0.26 in Q3 2011
* Revenue falls 23 percent as uranium sales, prices sag
* Cameco cuts long-term output goal to 36 mln pounds/year
from 40 mln
Oct 31 Canada's Cameco Corp on
Wednesday lowered its long-term uranium production target by 10
percent, a sharp shift in strategy in response to slower demand
growth for the fuel after the Fukushima nuclear disaster.
The uranium market has been in a downward spiral since a
massive earthquake and tsunami struck Japan in March 2011,
crippling the Fukushima-Daiichi atomic power plant.
Countries from Japan to Germany have reduced their
dependence on nuclear power in the aftermath of the worst
meltdown since Chernobyl, sending the spot price for uranium,
the material that fuels reactors, sharply lower.
Cameco, the world's largest publicly listed uranium
producer, reported a 50 percent drop in adjusted third-quarter
profit as prices and sales volumes sagged.
With a reduction in net new reactors being built over the
next decade, Cameco said it has cut its long-term uranium output
target to 36 million pounds a year by 2018, from a previous goal
of 40 million pounds.
The Saskatoon, Saskatchewan-based company said it has slowed
development work at its Millennium project in Canada's
uranium-rich Athabasca basin, along with projects in Kazakhstan
and Australia, until market conditions improve.
The focus will now be on bringing the company's Cigar Lake
project, also in the Athabasca region, into production, along
with brownfield growth around its existing mines in the area.
"By taking these actions, we expect to spread our capital
spending over a longer period and decrease project-related
expenses," said Chief Executive Tim Gitzel in a statement. "Our
focus will be on execution and reducing costs without
compromising on our values."
Cameco will continue minimal work on all its major projects
to ensure that when demand for more production returns, it will
be poised to be one of the first to respond.
Cameco expects 80 net new nuclear reactors to be built over
the next decade, down from a previous estimate of 95 net new
reactors. Currently, 64 reactors are under construction around
Cameco remains on track to produce some 21.7 million pounds
of uranium this year, and said it expects to meet its sales
forecast of 31 million to 33 million pounds, with a large
percentage of deliveries in the fourth quarter.
In the quarter ended Sept. 30, Cameco's adjusted earnings
were C$52 million ($52 million), or 13 Canadian cents a share.
That compared with C$104 million, or 26 Canadian cents a share,
a year earlier.
Including one-time foreign exchange derivative gains,
earnings were C$82 million, or 21 Canadian cents a share, in the
third quarter, compared with C$39 million, or 10 Canadian cents
a share, in the year-ago period.
Revenue fell 23 percent to C$408 million on lower uranium
sales and a drop in the realized uranium price.
Uranium sales were down 29 percent in the quarter, while the
realized uranium price fell 6 percent to $44.49 a pound.
Cameco also said it boosted its capital spending budget for
2012 to C$730 million, up from an early estimate of C$680
million, due to changes in the scope and scheduling of some of
its Canadian projects.