The $15 million contract Centrus Energy was awarded last month for decontamination and decommissioning (D&D) at the Energy Department’s Oak Ridge Reservation in Tennessee demonstrates the company is tapping new markets while riding out tough times in the nuclear fuel business, managers said Thursday.
The work authorization to prepare the K-1600 facility at the East Tennessee Technology Park for demolition came after the Bethesda, Md.-based company did similar work at DOE’s Portsmouth Site in Ohio. There, Centrus dismantled its American Centrifuge demonstration cascade.
The decommissioning work “Is just one example of how we are leveraging our technical capabilities to diversify and bring in new business,” President and CEO Daniel Poneman said during a conference call on Centrus’ third-quarter financial results.
“We believe that our proven success in completing the D&D of our demonstration cascade in Piketon under budget and on schedule positions us as a trusted partner on this project,” scheduled for completion in September 2019, Centrus spokesman Jeremy Derryberry said by email after the call.
In addition to dismantling the 120-machine centrifuge cascade and related support equipment at Portsmouth, Centrus shipped 5,660 cubic meters of contaminated waste from the decommissioning for disposal at the Nevada National Security Site over seven months, according to a company website.
While the Nuclear Regulatory Commission has not yet has not yet signed off on termination of Centrus’ license at the former Portsmouth Gaseous Diffusion Plant, Centrus is working with the NRC to cancel the $16.3 million in security bonds used to help finance the D&D work there, Poneman said. This would permit the company to receive the cash collateral, Derryberry said.
Centrus began D&D on its Portsmouth demonstration cascade in 2016, a few months after DOE stopped funding the project. It has also been testing its enrichment technology at K-1600, while constructing its own enrichment technology development building in Oak Ridge outside of Energy Department land.
“We see great potential in other sectors [besides decommissioning] as well, including advanced reactors, precision manufacturing, and national security programs,” Poneman said during the call. The company hopes to develop services and equipment for advanced reactors and enrichment technology for the defense purposes.
He said the company primary nuclear fuel business is seeing positive signs as well. While it no longer runs its own enrichment plant, it acts as a broker to buy and sell enriched uranium for customers.
“Despite a difficult market, we continue to make news sales to bolster our long-term order book, and we are well positioned with a diverse supply base to compete for the new business we anticipate will emerge in the early 2020s,” Poneman said.
Centrus recorded a quarterly net loss of $7.8 million, compared to net loss of $8.5 million in same quarter in 2017. The loss for common shareholders was $9.7 million, or $1.06 per share, for the quarter ended Sept. 30, less than the $10.5 million loss, of $1.15 per share, for common shareholders for the same period in 2017.
The company recorded revenue of $34.1 million for the quarter, down from $50.3 million in 2017. The Centrus guidance said it expects to produce between $175 million and $200 million in revenue for the year. Due to the nature of its contract schedule the company collects much of its receipts for the year in the fourth quarter.
Centrus had a cash balance of almost $125 million on Sept. 30 and expects to have between $100 million and $125 million at the end of the year.
Formerly known as USEC, Centrus Energy emerged from Chapter 11 bankruptcy protection in September 2014. The company was born as a result of the Energy Policy Act of 1992, which included a provision for the Energy Department to privatize its uranium enrichment program for commercial nuclear reactors. The company has not yet been able to commercialize its advanced centrifuge technology for enrichment, in part because planned commercial nuclear plant retirements in North America have decreased demand for the fuel.
