Centrus Energy Corp. closed out 2019 by boosting revenues and trimming its losses from the prior year, but management said the COVID-19 pandemic has for now dimmed the company’s hopes of returning to profitability in 2020.
On Wednesday, the Bethesda, Md.-based uranium-fuel broker and centrifuge developer reported a 2019 net loss of about $16.5 million, an improvement over its $105 million loss in 2018. Revenue rose to nearly $210 million from less than $195 million on a year-over-year basis, according to a company press release.
However, Centrus suspended its earnings guidance for 2020, citing unpredictability in the foreseeable future due to catastrophic economic fallout from the COVID-19 viral pandemic. In its 10-K filing with the Securities and Exchange Commission, Centrus said the global uranium supply chain could be “disrupted by quarantines, slowdowns or shutdowns, border closings, and travel restrictions resulting from the global COVID-19.”
In its third-quarter 2019 earnings report in November, the company predicted it would turn a profit this year. Centrus is the former U.S. Enrichment Corp., which rebranded after a Chapter 11 bankruptcy in 2014.
Annual revenue in the Centrus’ bedrock LEU segment, which includes brokerage of uranium fuel and natural uranium, rose to about $170 million in 2019 from roughly $165 million in 2018. Separative work sales, representing enriched uranium sold to utilities, dipped a little for the year, but sales of natural uranium to traders and utilities compensated, Centrus reported.
Centrus sells fuel refined by TENEX to nuclear power plants, generally returning the feed component to TENEX. The company said it expects to continue fuel deliveries to utilities during the ongoing COVID-19 pandemic response.
Meanwhile, in the technology-developing Technical Services segment that includes work on a new centrifuge cascade, Centrus’ 2019 revenue was $40 million, up from around $28 million.
For the fourth quarter, revenue fell to more than $55 million from some $83 million in 2018, while quarterly net losses narrowed to about $4.5 million from more than $45 million in 2018.
For the year, Centrus managed a gross profit — a figure that excludes taxes and other expenses to approximate the viability of the core business — of more than $30 million in 2019, compared with a gross loss of about $18 million in 2018.
On a conference call with investors this week, Daniel Ponemann, Centrus’ CEO and a former deputy energy secretary, said that because of the national COVID-19 response, “we expect that there will be impacts on cost and schedule” for a three-year cost share contract with the Department of Energy to build an all-domestic, 16-machine enrichment cascade at the Portsmouth Site in Piketon, Ohio.
The planned cascade, which Centrus starting working on last year, will use AC100M technology and be built on the same site as the canceled American Centrifuge Project. That project used similar technology, but included some components that could not legally be used to produce uranium for national defense needs.
“We are working closely with DOE and continue to make progress on the program,” Poneman said.
Centrus started work on the deal in July and is on the hook to produce 600 kilograms of high-assay low-enriched uranium fuel — consisting of about 20% uranium-235 — using AC100M centrifuges. It is supposed to be fuel for next-generation small modular reactors, which DOE wants to develop and commercialize.
The sole-source deal is a three-year, 80-20 cost-share pact including a two-year base and a one-year option that would increase its total value to $115 million.
The National Nuclear Security Administration plans to decide this year whether to use AC100 technology for national defense needs.
Meanwhile, like just about every other business in the country and the nuclear industry, Centrus has asked workers who can telework to do so. For workers who cannot, including those working in secure facilities at the Oak Ridge Site in Tennessee and the Portsmouth Site, Centrus is taking “a series of other steps” to protect workers from catching COVID-19, Poneman said.
