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Centrus Energy (LEU) - 2024 Q1 - Earnings Call Transcript
LEUCentrus Energy (LEU)2024-05-08 15:53
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Financial Data and Key Metrics Changes - In Q1 2024, Centrus Energy reported total revenue of 43.7million,grossprofitof43.7 million, gross profit of 4.3 million, and a net loss of 6.1million[8][10]−TheLEUbusinessgenerated6.1 million [8][10] - The LEU business generated 23.6 million in revenue, a decrease of 35.2millioncomparedtoQ12023,reflectingdecreasesinboththevolumeandaveragepriceofSWUsold[28]−Consolidatedgrossprofitdecreasedfrom35.2 million compared to Q1 2023, reflecting decreases in both the volume and average price of SWU sold [28] - Consolidated gross profit decreased from 23 million in Q1 2023 to 4.3millioninQ12024[29]BusinessLineDataandKeyMetricsChanges−TheLEUsegment′scostofsalesdecreasedfrom4.3 million in Q1 2024 [29] Business Line Data and Key Metrics Changes - The LEU segment's cost of sales decreased from 34.9 million in Q1 2023 to 23.1millioninQ12024,resultinginagrossprofitof23.1 million in Q1 2024, resulting in a gross profit of 0.5 million compared to 23.9millioninthesamequarterlastyear[28][29]−TechnicalSolutionsgeneratedrevenueof23.9 million in the same quarter last year [28][29] - Technical Solutions generated revenue of 20.1 million with cost of sales of 16.3million,comparedtorevenueof16.3 million, compared to revenue of 8.1 million and cost of sales of 9.0millioninQ12023[30]MarketDataandKeyMetricsChanges−TheenrichmentmarketintheU.S.isvaluedatapproximately9.0 million in Q1 2023 [30] Market Data and Key Metrics Changes - The enrichment market in the U.S. is valued at approximately 2.4 billion annually, while the international accessible market is about 1.9billionperyear[17]−ThecompanyisuniquelypositionedtomeetU.S.nationalsecurityneedsduetoitsU.S.originenrichmenttechnology[17]CompanyStrategyandDevelopmentDirection−CentrusaimstorestoreAmericanuraniumenrichmentcapacityandistheonlyAmerican−ownedtechnologyenricher[15]−Thecompanyispursuingpublic−privatepartnershipstoscaleupproductionofHALEUandLEU,requiringsignificantfederalinvestmentalongsideprivatecapital[18]−CentrussubmittedproposalstotheDepartmentofEnergyforupto1.9 billion per year [17] - The company is uniquely positioned to meet U.S. national security needs due to its U.S. origin enrichment technology [17] Company Strategy and Development Direction - Centrus aims to restore American uranium enrichment capacity and is the only American-owned technology enricher [15] - The company is pursuing public-private partnerships to scale up production of HALEU and LEU, requiring significant federal investment alongside private capital [18] - Centrus submitted proposals to the Department of Energy for up to 3.5 billion in long-term awards to stimulate HALEU production [19][20] Management's Comments on Operating Environment and Future Outlook - The management highlighted the dramatic changes in the nuclear fuel market due to geopolitical factors and the need for a reliable supply chain for nuclear fuel [32][34] - The company expects supply chain issues with HALEU storage cylinders to be resolved by fall 2024 [54] Other Important Information - Centrus ended the quarter with a cash balance of 209.3millionandanadditional209.3 million and an additional 32.6 million in restricted cash, totaling 241.9million[36]−Thecompanyhassecuredapproximately241.9 million [36] - The company has secured approximately 900 million in conditional sales commitments to support LEU production, contingent upon public-private investment [23] Q&A Session Summary Question: More details on the 900millionLEUcontingentcommitments−ManagementexplainedthatthesecommitmentsareforproductionattheirPiketonfacilityandindicatestrongmarketdemandforanewcompetitorintheLEUmarket[43][45]Question:Howdoesthe900 million LEU contingent commitments - Management explained that these commitments are for production at their Piketon facility and indicate strong market demand for a new competitor in the LEU market [43][45] Question: How does the 2.7 billion HALEU incentive play out with the Russian import ban? - Management confirmed that the ban unlocks significant funding for the industry, positioning Centrus well for competition [46][47] Question: Insights into the waiver process for the uranium import ban - Management stated that they are preparing to apply for waivers and believe the case for waivers is strong and in the national interest [50][52] Question: Current status of HALEU cylinder supply from DOE - Management anticipates that cylinder supply issues will be resolved by fall 2024 [54] Question: Impact of UK government funding for a HALEU facility on Centrus - Management noted that Centrus is ahead in HALEU production and views the UK investment as a positive signal for the market [62] Question: LEU production capacity if fully built out - Management estimated that the facility could produce approximately 3.5 million SWU annually [66]