23 Feb (NucNet): USEC has reported a sharp fall in profit for 2010 compared to the previous year.
USEC said yesterday that net income for 2010 was 7.5 million US dollars (USD) (about 5.5 million euro) compared to net income of USD 58.5 million for 2009.
"Gross profit declined due to lower volume of separative work units (SWU) sold, higher unit costs for SWU and uranium, and lower average uranium selling price," USEC said. "These declines were partially offset by higher average SWU selling prices and increased revenue recognition of uranium sold in prior periods. A three percent increase in the average price of SWU billed to customers was more than offset by higher electricity costs on a per SWU basis and higher purchase costs from Russia, squeezing gross profit margins. In addition, USEC ended the year with a cash balance of USD 151 million."
However, the company pointed out that a majority of reactors it serves are refuelled on an 12-to-24-month cycle, which "can lead to significant quarterly and annual swings in SWU sales volume that reflects the mix of refueling cycles". Therefore, short-term comparisons of USEC's financial results are not necessarily indicative of longer-term results, the company added.
In a separate announcement yesterday, USEC said it was pleased with
progress being made in talks with the US Department of Energy (DOE)
over a possible loan guarantee for its American Centrifuge Plant programme in the US state of Ohio.
USEC president and chief executive officer John Welch said: "I am
optimistic that we can reach an agreement on terms in the near future
and that DOE will then be able to move promptly to issue the conditional (loan guarantee) commitment. We want to move forward as quickly as possible so that we can begin remobilising construction of the American Centrifuge Plant, but recognise that the DOE needs to structure an agreement that protects the American taxpayer by ensuring loan repayment and we are committed to achieving that goal as well."
USEC says the DOE's loan guarantee programme is essential to obtaining
the financing needed to complete the plant and it has applied for a USD 2 billion loan guarantee. As of December 2010, USEC said it had invested about USD1.95 billion in the American Centrifuge programme.
Construction on the plant began in May 2007 after a construction and
operating licence was issued by the US Nuclear Regulatory Commission.
In May 2010, Toshiba and Babcock & Wilcox signed an agreement to invest USD 200 million between them in USEC, in part aimed at strengthening USEC’s financial position for the deployment of the American Centrifuge Plant.
Details of the company's results and update on the American Centrifuge programme are available online (http://www.usec.com).
>>Related reports in the NucNet database (available to subscribers)
Financial Advisor To ‘Explore Strategic Alternatives’ For USEC (News
in Brief No. 140, 3 November 2009)
USEC Secures USD 200 Million Investment For Centrifuge Project (News
in Brief No. 92, 25 May 2010)
USEC And DOE Modify American Centrifuge Agreement (News in Brief No.
33, 17 February 2011)
