Earnings were down year-over-year for Centrus Energy in the second quarter of 2023, despite the uranium broker and enrichment-technology developer receiving the go-ahead from the Nuclear Regulatory Commission to produce High-Assay Low-Enriched Uranium this year.
The Bethesda, Md., company reported $12.7 million in net income, or $0.84 a share, in the second quarter on $98.4 million in revenue, compared with a net income of $37.4 million for the three months ended June 30, 2022, according to a statement released on Friday.
But those numbers are up substantially from first-quarter earnings of $7.2 million in net income, or $0.49 a share, in the first quarter on $66.9 million in revenue. Centrus’ quarterly results can fluctuate greatly year-over-year and quarter-to-quarter, based on the timing of uranium fuel orders from nuclear power plant owners.
Revenue from the LEU segment was $87.6 millio in the three months ended June 30, 2023, up $2.1 million from $85.5 million in the same period last year. The increase was primarily due to the $39.5 million increase in uranium revenue for the three months ended June 30, 2023, partially offset by a $37.4 million decrease in SWU revenue.
Revenue from the Technical Solutions segment, which includes a Department of Energy contract to produce high assay low enriched uranium (HALEU), was $10.8 million, a decrease of $2.8 million from the first quarter of 2022. The decrease was primarily related to the transition from the HALEU Demonstration Contract to the HALEU Operation Contract in late 2022, the company said.
In the three months ended June 30, 2023, the HALEU Operations Contract generated $10.4 million in revenue, whereas the precursor HALEU Demonstration Contract generated $12.1 million in revenue for the same period in 2022.
“This quarter Centrus achieved a major milestone, receiving NRC authorization to begin first-of-a-kind HALEU production,” said Centrus President and Chief Executive Daniel Poneman, in a statement released alongside the company’s earnings on Friday morning. “We are on track to complete our initial HALEU production milestone by the end of the year.”
Centrus is the only company in the U.S. with a license from the Nuclear Regulatory Commission (NRC) to produce HALEU. In early February, the company completed construction and initial testing of a cascade of advanced uranium enrichment centrifuges, from which it must produce a test batch of HALEU by year’s end in order for the NRC to sign off on its entry into rate production.
DOE finalized the HALEU operations contract with Centrus in November. The deal to operate the 16-machine HALEU cascade at the agency’s Portsmouth Site near Piketon, Ohio, is worth up to $1 billion over 10 years.
In June, Centrus announced that it had completed its NRC operational readiness review for HALEU production and received NRC approval to possess uranium at the Piketon, Ohio, site and to introduce uranium into the cascade of centrifuges Centrus has constructed.
The HALEU contract’s two-year base period runs through 2024, is worth $150 million and is split into three phases.
The first phase of the contract, the only phase with a cost-share, calls for Centrus to produce a 20 kilograms test batch of DOE-approved HALEU by Dec. 31, 2023. That phase carries a $30 million cost share that DOE will match. Phase 2 involves a full year of production with an annual rate of 900 kilograms of HALEU. DOE then has the option to extend the contract for up to nine years in three year increments after 2024.
Centrus’ new HALEU cascade uses the same AC100M centrifuge technology the National Nuclear Security Administration (NNSA) had considered using as the cornerstone of the next national-defense cascade. If the company can produce an all-domestic version of these centrifuges, which the cascade in Portsmouth is not, the machines could be used to refine uranium for nuclear weapons and Navy warships and submarines.
The NNSA recently put its search for a new all-domestic enrichment cascade back on the front burner.
