(Reuters) - Cameco Corp (CCO.TO) reported a 45 percent increase in quarterly profit on Tuesday as the world’s second-largest producer sold more uranium at a higher average price.
The company’s shares rose 3.43 percent to C$22.56 in early dealings after Cameco said its profit climbed to C$132 million ($133.6 million), or 33 Canadian cents a share, in the first quarter. That compared with C$91 million, or 23 Canadian cents, in the year-earlier period.
Excluding one-time items, earnings were C$124 million, or 31 Canadian cents a share, up from C$85 million, or 21 Canadian cents, in the first quarter of 2011.
Revenue rose 22 percent to C$563 million on a 33 percent boost in sales volume.
Cameco warned it expects to cancel one of its long-term sales contracts in the second quarter and take a $30 million hit as it continues to negotiate with customers in the aftermath of last year’s Fukushima nuclear disaster.
Japan has shut down all but one of its nuclear reactors since March 2011, when a massive earthquake and tsunami crippled the Fukushima power plant leading to the world’s worst nuclear accident since Chernobyl. Japan has not yet made clear what role nuclear will play in its future.
Cameco said it expects to replace the terminated contract, which covered deliveries of 3.4 million pounds of uranium over the course of 2012 through 2016, with other customers at a higher average price.
The company’s production in the first quarter rose slightly to 4.8 million pounds, while sales volume was up 33 percent to 8.1 million pounds. Cameco’s average realized price per pound of uranium rose slightly to $48.77.
The Saskatoon, Saskatchewan-based company said it remains focused on bringing the long-delayed Cigar Lake mine in Saskatchewan into first production by mid 2013 and on expanding its mines in the United States and Kazakhstan.
“We will sustain our focus on our growth strategy, growth that we believe will be needed to fuel the world’s increasing appetite for safe, clean, reliable and affordable energy,” Chief Executive Tim Gitzel said in a statement.
Cameco expects to spend C$620 million on mining and development projects in 2012, with existing cash balance and operating cash flows covering its capital requirements.
It maintained its forecast for production of 21.7 million pounds of uranium in 2012, with anticipated sales of 31 million to 33 million pounds.
Cameco plans to increase output to 40 million pounds a year by 2018 to meet growth in demand from such countries as China, India and South Korea.
Reporting by Julie Gordon; Editing by Peter Galloway