Cameco Eyes Growth After U.S. Nuclear Deal Despite Losses

Cameco Corp. reported a small loss in its latest quarterly results, but the Saskatoon-based uranium mining company is poised for growth following a significant partnership with the U.S. government. This agreement involves Westinghouse Electric Co., in which Cameco holds a partial stake, to construct nuclear reactors valued at over US$80 billion. Chief Executive Officer Tim Gitzel described the collaboration as a “transformational partnership” during the company’s earnings call.

Cameco’s third-quarter revenues reached $615 million, a decline of 15 percent compared to the same period last year. Despite this, Gitzel emphasized that quarterly earnings can fluctuate based on the timing of customer orders, suggesting that annual performance metrics offer a more accurate reflection of the company’s trajectory. “We are more confident in achieving our annual sales target of up to 34 million pounds of uranium this year,” he stated.

The company has noted improvements in realized prices across its uranium and fuel services segments. Additionally, equity earnings from its investment in Westinghouse have shown an upward trend compared to last year. Gitzel, who recently toured two of Westinghouse’s reactors in Georgia, underscored the importance of innovation and policy alignment in driving advancements in nuclear technology. He expressed optimism about the partnership, stating, “I’m delighted to touch on the transformative partnership between Cameco, Brookfield, the U.S. government, and Westinghouse, marking a major milestone for the company and the entire sector.”

Since late 2023, Westinghouse has been jointly owned by Cameco, which holds 49 percent, and Brookfield Business Partners L.P., which owns the remaining 51 percent. Gitzel highlighted the long-term commitment to nuclear energy as an indicator of growing momentum within the industry. As of September 30, 2023, Cameco reported having $779 million in cash and cash equivalents, alongside $1 billion in total debt and an undrawn revolving credit facility of $1 billion.

Looking ahead, Gitzel asserted that nuclear energy is not only maintaining its relevance but is also experiencing significant growth and transformation. He noted that the entire fuel cycle is gaining more attention, encompassing areas from uranium mining to reactor deployment. “The momentum is real,” he said.

Devan Mescall, the Edwards enhancement chair in business at the University of Saskatchewan, acknowledged that, despite not meeting analyst expectations for the quarter, Cameco’s overall performance for the year is strong. “Revenue is up, gross profit is up, and the price of uranium has improved compared to last year,” Mescall commented. He praised the company’s ability to manage production costs effectively, allowing it to remain competitive and profitable.

Cameco’s strategy of vertical integration, particularly through its investment in Westinghouse, is beginning to yield dividends. This approach not only diversifies revenue streams but also enhances long-term demand for uranium. Mescall pointed out that this partnership addresses a critical need for electricity, especially in light of increasing industrial and artificial intelligence demands. “This is good news for Saskatchewan,” he added, noting the essential role of nuclear energy in providing low-carbon solutions to meet future electricity needs.

During the call, Gitzel concluded with an optimistic outlook, stating, “These are incredibly exciting times for this industry, and the outlook is becoming stronger with each passing day. We’re not just participating in the energy transition; we’re shaping it.” This sentiment reflects Cameco’s determination to navigate challenges while seizing growth opportunities in the evolving energy landscape.