Jeff Lagerquist
Tue, October 31, 2023 at 12:06 p.m. MDT·3 min read
Cameco CEO Tim Gitzel says U2 rocker Bono's recent shift from an ANTI nuclear energy activist, to a supporter, is bullish for the uranium industry. (Michele Tantussi / reuters)
Shares of Cameco (CCO.TO)(CCJ) hit a 52-week high on Tuesday as the Canadian uranium miner raised its 2023 revenue guidance amid rising prices for nuclear fuel.
Saskatoon-based Cameco now expects to earn between $2.43 billion and $2.58 billion this year, a $500 million increase from its prior guidance.
The company on Tuesday reported third-quarter profit of $148 million, compared with a $20 million loss in the same period last year. Revenue for the three months ended Sept. 30 topped $575 million, up from $389 million in the third quarter of 2022.
Toronto-listed Cameco shares rose nearly 10 per cent in Tuesday's trading session, climbing as high as $57.62. The stock was up 8.12 per cent to $56.61 as at 12:38 p.m. ET.
Cameco Corporation (CCO.TO)
A combination of rising concerns about energy security, growing urgency to address climate change, and expectations for surging global electricity demand have improved the outlook for uranium in recent years. At the same time, years of underinvestment following Japan's Fukushima nuclear accident have impacted global supply.
The International Energy Agency says global nuclear capacity must double by mid-century from 2020 levels to help meet the world's various net-zero commitments.
"There are a number of notable differences in the market's evolution and prospectivity compared to past cycles," Cameco CEO Tim Gitzel told analysts on a post-earnings conference call Tuesday morning.
"Cameco's valuation should therefore reflect a scarcity premium. No other publicly-traded uranium company offers similar exposure to that durable full-cycle demand growth across the fuel cycle that's occurring in the nuclear industry."
According to a Bloomberg report, several hedge fund managers are ratcheting up their exposure to uranium stocks.
Gitzel says nuclear power is now an "undeniable part of the social conversation," noting a recent meeting with Prime Minister Justin Trudeau and Ukrainian President Volodymyr Zelenskyy, as well as an apparent change of heart by U2 frontman Bono.
"Longtime nuclear protesters, like Bono of U2, just last month admitted that although he has campaigned against nuclear energy for a long time, his view has flipped to support nuclear amid the climate crisis," Gitzel said on the call. "We're seeing a social shift happening like never before."
The company said on Tuesday that it continues to expect its $7.9 billion deal in partnership with Brookfield Renewable Partners (BEP-UN.TO)(BEP) to acquire nuclear power plant equipment maker Westinghouse Electric to close by year's end.
Gitzel also addressed operational challenges that forced Cameco to lower its 2023 production guidance last month. The company's Cigar Lake and Key Lake operations were impacted by equipment reliability issues, as well as labour, and supply chain issues.
"I'm happy to say it's going a lot better," Gitzel said, describing the problems as "short term."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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