Kazatomprom (LSE: KAP), the world’s largest uranium producer, has for the six months to June reported a 25% year-on-year growth in consolidated revenue on higher sales volumes and a recovering uranium price over the past year.
The Kazakhstan-based company’s performance and future production plans mirror the surging demand and favourable conditions in the global uranium sector, emerging from a decade-long slump following the 2011 Fukushima nuclear disaster in Japan.
The company’s chairman, Yerzhan Mukanov, underlined a steady turnaround in market fortunes over the past 12 months. “The company demonstrated strong financial results for the first half of 2023, which reflects a significant improvement in the situation on the uranium market over the past year,” he said in a statement.
Kazatomprom’s consolidated revenue for the six months to June was KZT 618,744 million (about US$1.3 billion), marking a 25% increase from KZT 493,716 million in the year-earlier period. The revenue growth was attributed to the rise in the average realized uranium price, increased sales volume, and increased revenue from uranium products, including fuel pellets and rare metal products.
The average realized uranium price stood at US$46.63 per lb., a 17% increase from US$39.70 a year ago.
Kazatomprom produced an attributable 5,411 tonnes of uranium oxide (U3O8) during the six months to June, nearly matching its year-earlier output of 5,414 tonnes.
Across its Kazakhstan production base comprising mostly in-situ recovery wells, including that from its partners, Kazatomprom’s total uranium output amounted to 10,225 tonnes in the first half, a 2% increase from last year’s 10,070 tonnes.
Sales volumes for Kazatomprom in the period were 7% higher than last year, mainly due to the timing of customer-scheduled deliveries.
The company’s operating profit for the period was KZT 252,497 million (about US$543 million), up 46% from KZT 172,818 million in last year’s first half.
The company’s net profit rose 33% to KZT 222,333 million (about US$478 million) from KZT 167,374 million in the first half of 2022. The rise was mainly attributed to the increased operating profit.
For 2023, Kazatomprom forecasts production of 45-47 million lb. of uranium on a 100% basis and 23-24 million lb. on an attributable basis. The all-in-sustaining cash cost is expected to range between US$21.00 and $22.50 per pound.
The company’s attributable production represented about 22% of the global primary uranium production in 2022.
Kazatomprom operates 26 deposits in Kazakhstan through its subsidiaries, joint ventures, and associates, using in-situ recovery technology.
Kazatomprom’s global depository receipts in New York last traded at US$29.50, up 1.1% over the past 12 months, having touched US$25.00 and US$33.88 per share. It has a market capitalization of £6 billion (US$7.6 billion).
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