News

Cameco president says this year flat, but long-term remains strong

SASKATOON – The president and CEO of Cameco (TSX:CCO) says the long-term outlook remains strong for the uranium company, but this year has so far been flat.

Tim Gitzel and other executives held a conference call today on the company’s third-quarter results.

He says reactor re-starts in Japan are in the offing, which will mean more demand for uranium.

Gitzel also highlighted the success of the Cigar Lake mine in northern Saskatchewan and its unique jet-boring system.

The update also included the latest information on the tax dispute with the Canada Revenue Agency.

Senior vice-president and chief financial officer, Grant Isaac, says the trial will begin in September 2016 and should last four weeks, with a decision six to 18 months after that.

This stems back to 1999 when Cameco opened Cameco Europe based out of Switzerland, which has a lower tax rate.

The company signed an agreement with the subsidiary to sell uranium at a low fixed price, which the European company can sell at a higher world price, so more profits show in Europe than Canada.

The revenue agency is questioning this practice.

Net losses were $4 million ($0.01 per share diluted), compared to net losses of $146 million ($0.37 per share diluted) in the third-quarter of 2014.

On an adjusted basis, Cameco’s earnings this quarter were $78 million, compared to $93 million in the same time period last year. Gitzel said that’s due to lower gross profit from uranium and lower tax recovery, but adds the fourth quarter is traditionally when the sales happen.

Revenue was $649 million, up from $587 million in the third-quarter in 2014.

(CJWW, The Canadian Press)