By Rod Nickel
WINNIPEG, Manitoba, August 1 (Reuters) - Canada’s Cameco Corp, one of the world’s biggest uranium producers, reported higher quarterly profit on Thursday, but said it planned to cut costs as prices struggled due to reduced demand for nuclear fuel.
The Saskatoon, Saskatchewan-based company also reported higher quarterly revenue. Both profit and revenue were lower than expected.
Shares rose fell 0.7 percent in New York to $20.18 and 0.5 percent to C$20.76 in Toronto in early trading.
Uranium prices have been weak since an earthquake and tsunami struck Japan in March 2011, crippling the Fukushima-Daiichi atomic power plant, and leading Japan to shut down nearly all of its reactors.
Four utilities have applied to restart 12 of Japan’s 48 idled reactors, Cameco said.
Cameco Chief Executive Tim Gitzel said the company planned to cut costs by 10 percent to boost profits and would target administration, operations and capital. The company has already cut its workforce by 8 percent, it said.
With the cuts, the company will incur C$13 million in restructuring costs against this year’s results.
But Cameco also said its share of the total capital cost for the Cigar Lake, Saskatchewan, mine would increase by 15 percent to 25 percent from the previous estimate of C$1.1 billion. The mine, in which Areva SA also owns a major stake, is on course to begin production later this year.
Net earnings for the second quarter rose to C$34 million, or 9 Canadian cents per share, from C$5 million, or 1 Canadian cent per share, a year before, as sales and average realized uranium prices rose year over year.
Adjusted earnings were C$61 million, or 15 Canadian cents per share, up from C$31 million, or 8 Canadian cents per share, a year earlier.
Revenue jumped 49 percent to C$421 million.
Analysts expecting earnings per share of 19 Canadian cents on revenue of C$571.5 million.
Uranium sales rose 28 percent to 6.4 million pounds on lower production of 4.4 million pounds. Cameco buys some of the uranium it sells from other producers.
Cameco’s average realized uranium price rose 10 percent to $46.30 per pound, exceeding the industry’s average spot price of $40.18.
It maintained its forecast for 2013 uranium production of 23.3 million pounds, up from 21.9 million in 2012, and sales of 31 million to 33 million pounds, after adding in planned purchases. Last year, Cameco sold 32.5 million pounds of uranium.