Cameco Raises 2024 Uranium Production Guidance, Boosts Dividend in Q3 Results

Major uranium producer Cameco (TSX:CCO,NYSE:CCJ) shared its third quarter results on Thursday (November 7), reporting a strong performance despite production setbacks at its Kazakhstan operations.

The company reported uranium production of 4.3 million pounds, up 43 percent from the year-ago period. Sales volumes came in at 7.3 million pounds, relatively flat from 7 million pounds in Q3 2023.

Revenue stood at $721 million, a 75 percent increase year-on-year. Cameco's net earnings attributable to shareholders were $7 million, a decrease of 95 percent from the $148 million seen 12 months ago.

"Third quarter results reflect normal quarterly variations in sales volumes, as well as delayed sales for Joint Venture Inkai due to continued transportation challenges, and the ongoing impact of purchase accounting for Westinghouse," Cameco said. The company owns Inkai in a partnership with top uranium miner Kazatomprom (LSE:KAP,OTC Pink:NATKY).

Explaining Inkai's status, the company said that while its Q3 output was similar to last year, its production for the first nine months of 2024 came in lower versus the same period in 2023. This was the result of differences in the annual mine plan, along with a shift in the acidification schedule for new wellfields and unstable sulfuric acid supply.

Inkai's maximum 2024 output is now estimated at around 7.7 million pounds on a 100 percent basis. The previous target was 8.3 million pounds, and was contingent on access to sufficient amounts of sulfuric acid.

Despite the challenges at Inkai, Cameco is boosting its 2024 production guidance to 23.1 million pounds due to strong output at its McArthur River/Key Lake operation. Its previous forecast was 22.4 million pounds.

Given its performance, Cameco has declared an annual dividend increase, setting its 2024 dividend at $0.16 per common share. It will be payable on December 13, 2024, to shareholders of record as of November 27, 2024.

Tim Gitzel, Cameco’s president and CEO, said the firm's board is also considering a growth plan that could see the dividend rise to $0.24 per common share by 2026, doubling the amount from 2023.

He added that Cameco has been cautious in committing output from its tier-one assets under long-term agreements, positioning it to capture potential price increases over time. The company continues to selectively manage its uranium and UF6 conversion capacity contracts, favoring long-term commitments with deliveries planned over a decade.

Cameco also notes that it incurred a net loss of $57 million for its share of the Westinghouse operation in Q3, higher than Q2's net loss of $47 million. It expects to see improvements in Q4 due to seasonal variations in Westinghouse’s customer demand and favorable industry conditions, such as rising governmental and public support for nuclear energy.

Looking forward, Cameco aims to advance its dividend growth plan and remains focused on selective long-term contracting to maximize profitability in an environment of rising demand for nuclear power.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.