As it deals with contamination, delays and production problems, Cameco (CCO-T) reported a record $205 million in earnings during the second quarter thanks to a uranium spot price thats three times what it was during the same period last year.
Thats a 166%-increase over last years quarterly earnings of $77 million while revenue rose 74% to $725 million compared to $417 million in 2006.
The companys revenue from gold was similar to the second quarter but proceeds from electricity dropped due to lower generation. Cameco earned $31 million before taxes at its Bruce Power Limited Parntership, a drop of $7 million from 2006. Gold revenue was $117 million compared to $113 million in 2006.
A 61%-increase in the realized selling price of uranium and a 100%-increase in sales volumes boosted uranium revenue by $317-million to $458 million.
The uranium spot price during the second quarter averaged US$125.83 per lb. compared to US$43.42 per lb. during the second quarter in 2006.
Fuel service revenue increased to $64 million from $57 million.
Gold revenue dropped to $117 million, down about $4 million over 2006 due to lower production. Centerra Gold (CGI-T), which is 53% owned by Cameco, reduced its production estimate to about 550,000 oz. gold from 700,000 oz. gold for 2007.
The company ended two of three standby product loan agreements in April so the second quarter results include recognition of previously deferred revenue totalling $39 million as well as the associated costs of sales on 2.6 million lbs. U3O8. The company can borrow up to 2.6 million lbs. of U3O8 equivalent under the remaining agreement.
Cameco expects revenue to continue increasing in the third quarter by about 10% due to higher sale prices for uranium and electricity.
Over the course of the year, Cameco projects its revenue will grow by 40%.
The company was forced to shut down its Port Hope UF6 production plant on July 19 after an employee discovered soil contaminated with uranium from an unknown source while doing excavation work inside the plant. Cameco says it will release a revised production schedule once it knows how long it will take to clean up the spill.
Production at Cigar Lake has been further delayed to 2011 from 2010 the next progress update will be released on Sept. 19.
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