There are lots of highlights and optimism for Cameco, but 2014 has been another difficult year for the uranium producer. It is still waiting for long-term contracts and it is still being affected by low world prices for a commodity that is one of the biggest industries in Saskatchewan’s north.
Today, company CEO Tim Gitzel reviewed last year’s numbers and gave his projections for the future in a conference call with shareholders and members of the media. Cameco ended 2014 with a 14% increase in net earnings for shareholders, but that did not off-set losses during the first nine months of the year. The world’s largest uranium producer ended 2014 with net earnings for shareholders of $185 million, down 42% from 2013.
Gitzel says the news is not all bad.
“This year, I am happy to say we operate the two largest high-grade uranium mines in the world — McArthur River and our newest operation at Cigar Lake. Production from the mine and first packaged pounds from Cigar Lake were certainly highlights for 2014.”
Gitzel says the industry is still struggling with world prices hitting a nine-year low in July. He says new long-term contracts that he was expecting have not materialized — but he says there is exceptional growth on the horizon.
He says billions of dollars are being invested in reactor construction around the world.
“Ours is a long lead-time industry. A mine can take up to 10 years to bring on when things go well. So in our view, the market will be calling for more uranium at a time when it could be difficult for primary supply to keep up and that is what we continue to plan for.”
Gitzel says 2015 is expected to be another difficult year for the industry. Cameco expects revenue to be down 5 – 10% as a result of a drop in deliveries and lower sales prices. However, Cameco does stand to gain because of the sliding value of the Canadian dollar.