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Re: gfp927z post# 79

Saturday, 11/18/2023 6:04:23 PM

Saturday, November 18, 2023 6:04:23 PM

Post# of 85
>>> Centrus Reports Third Quarter 2023 Results


PR Newswire

November 7, 2023


https://finance.yahoo.com/news/centrus-reports-third-quarter-2023-221500136.html


Began production of High-Assay Low-Enriched Uranium (HALEU) in October 2023 and Completed Phase I of Department of Energy contract in November 2023.

Annuitized $186.5 million of pension plan obligations for 1,400 beneficiaries, de-risking balance sheet and improving the capital structure

Net income of $8.2 million on $51.3 million in revenue, compared to net loss of $6.1 million on $33.2 million in revenue in Q3 2022

Consolidated cash balance of $183.3 million as of September 30, 2023


BETHESDA, Md., Nov. 7, 2023 /PRNewswire/ -- Centrus Energy Corp. (NYSE American: LEU) ("Centrus" or the "Company") today reported third quarter 2023 results. The Company reported net income of $8.2 million for the three months ended September 30, 2023, compared to a net loss of $6.1 million for the three months ended September 30, 2022. The net income per common share in the three months ended September 30, 2023 was $0.53 (basic) and $0.52 (diluted).

"Centrus made history on October 11, inaugurating the first new U.S.-technology, U.S.-owned uranium enrichment plant to begin production since 1954," said Centrus President and CEO Daniel B. Poneman. "Our team completed this work under budget and ahead of schedule, proving once again our ability to execute on complex, mission-critical projects. As we pursue our goal of expanding the plant to meet the full range of commercial and national security requirements for enriched uranium, we are heartened by the growing momentum in Congress and the Administration to support a major federal investment in restoring America's domestic enrichment capacity. Centrus stands ready to do our part to help reclaim America's global leadership in nuclear fuel production."

The quarter also demonstrated Centrus' critical role in the supply chain to deploy advanced nuclear reactors through the Memoranda of Understanding concluded with TerraPower and Oklo.

Our financial results vary from quarter to quarter based on the timing of contracted deliveries and the specific contract terms. The majority of our LEU contracts are multi-year arrangements in which customers have annual purchase obligations, but can choose in which quarter to take delivery. We record the revenue and cost of sales in the quarter when deliveries are made, which can vary throughout the year, but tends to even out on an annual basis.

Financial Results

Centrus generated total revenue of $51.3 million and $33.2 million for the three months ended September 30, 2023 and 2022, respectively, an increase of $18.1 million.

Revenue from the LEU segment was $40.5 million and $20.2 million for the three months ended September 30, 2023 and 2022, respectively, an increase of $20.3 million. The increase was due to the $32.8 million increase in SWU revenue, partially offset by the $12.5 million decrease in uranium revenue for the three months ended September 30, 2023. The increase in SWU revenue was due to an increase in the volume of SWU sold and an increase in the average price of SWU sold.

Revenue from the Technical Solutions segment was $10.8 million and $13.0 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of $2.2 million. The decrease was primarily related to the transition from the HALEU Demonstration Contract to the HALEU Operation Contract in late 2022. For the three months ended September 30, 2023, the HALEU Operation Contract generated $8.9 million in revenue. The HALEU Demonstration Contract generated $1.3 million in revenue for the three months ended September 30, 2023, compared to $11.7 million in revenue for the same period in 2022.

Cost of sales for the LEU segment was $30.4 million and $18.9 million for the three months ended September 30, 2023 and 2022, respectively, an increase of $11.5 million. The increase was due to a $23.9 million increase in SWU costs, partially offset by a $12.4 million decrease in uranium costs. The increase in SWU costs reflected an increase in the volume of SWU sold and an increase in the average unit cost of SWU sold. Cost of sales for the three months ended September 30, 2023 included $0.6 million for the revaluation of inventory loans.

Cost of sales for the Technical Solutions segment was $9.6 million and $12.0 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of $2.4 million. The decrease was related to a decrease of $10.8 million of costs associated with the HALEU Demonstration Contract signed in 2019 and a decrease in costs of approximately $1.0 million associated with other contracts, partially offset by $9.4 million of costs incurred for the HALEU Operation Contract signed in 2022.

Gross profit for the Company was $11.3 million and $2.3 million for the three months ended September 30, 2023 and 2022, respectively. The increase for the three months ended September 30, 2023 was due primarily to the specific contract and pricing mix of SWU contracts and the timing of their deliveries quarter over quarter. This was reflected by an increase in the volume of SWU sold and an increase in the average profit margin per SWU.

HALEU Update

On September 6, 2023, the Company announced that it was conducting final system tests and other preparations so that production of HALEU could commence at our American Centrifuge Plant in Piketon, Ohio. On September 21, 2023, the Nuclear Regulatory Commission granted final approval for the Company to produce the quantity of HALEU required by Phase 1 of the contract. On October 11, 2023, the Company announced the beginning of enrichment operations. On November 6, 2023, the Company completed production of the initial 20 kilograms of HALEU UF6 under Phase 1 of the HALEU Operation Contract. In Phase 2 of the contract that has a cost-plus-incentive-fee structure, Centrus is required to produce 900 kilograms of HALEU UF6. The Department of Energy takes delivery of the HALEU on site in Piketon and is obligated to provide the HALEU storage cylinders to collect the HALEU from the cascade; Centrus has constructed a storage facility where the HALEU will be kept until it is needed.

TerraPower and Oklo Memoranda of Understanding

In July and August, 2023, the Company signed memoranda of understanding with TerraPower and Oklo, respectively, to support the deployment of additional HALEU production capacity in Piketon, Ohio subject to negotiating definitive agreements. Centrus and TerraPower will collaborate to ensure that TerraPower's Natrium demonstration reactor has access to HALEU at the milestones necessary to meet the TerraPower project's 2030 operation date. Centrus and Oklo will collaborate on activities including Oklo's purchase of HALEU and manufactured components from Centrus, and Centrus' purchase of electricity from Oklo's planned Aurora powerhouses in Piketon, Ohio.

Pension Annuitization

On October 12, 2023, the Company entered into an agreement to purchase a group annuity contract for one of its pension plans and transfer approximately $186.5 million of its pension plan obligations, or 41% of its obligations for the plan, based on the December 31, 2022 valuation, to an insurer. The purchase of the group annuity contract was funded directly by the assets of the pension plan of approximately $171.4 million. The purchase resulted in a transfer of administrative and benefit paying responsibilities for approximately 1,400 beneficiaries to the insurer. Centrus believes this move will de-risk its balance sheet by reducing its risk for current and future liabilities at no detriment to pensioners. The Company estimates that the income related to the pension settlement recognized in the fourth quarter will be approximately $15.1 million, dependent upon the completion and final pricing of the annuity transaction The settlement charge will be recognized in nonoperating components of net periodic benefit loss (income) in our consolidated statements of operations.

About Centrus Energy Corp.

Centrus Energy is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal. With world-class technical and engineering capabilities, Centrus is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future.

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