Uranium broker and enrichment technology developer Centrus, Bethesda, Md., posted a profitable 2021, easily besting year-ago figures with a net income of $175 million, or $9.75 a share, on revenue of about $300 million, the company reported Thursday.
That compared with a net income of almost $54.5 million, or 57 cents a share, in 2020. Revenue for 2021 included a $43.5 million settlement over employee pensions with the Department of Energy in the third quarter, and that accounted for most, but not all, of the improvement on the top line, according to Centrus’ latest earnings presser. In 2020, revenue was just over $247 million.
On a conference call with investors on Friday, a little more than two weeks after Russia invaded Ukraine, Dan Poneman, Centrus’ CEO, said the company appeared able in the short term to ride out any uranium supply disruptions from Russia, a key provider of the enriched fuel Centrus brokers to U.S. utilities.
But “obviously the longer a disruption would go on, the more challenging that would become,” Poneman said. “I’m not in a position here today to sort of get very precise about quantities or timelines.”
“[W]e do have a diversified supply capability,” Phillip Strawbridge, Centrus’ CFO, said on Friday’s call. “[T]hat’s not to say that there won’t be an impact, but we think that we have the capability in the near-term. It all depends on how long it is.”
France is among the other foreign providers of Centrus-brokered enriched uranium.
Separative work unit revenue in the flagship Low-Enriched Uranium segment, which accounts for uranium fuel sold to utilities, increased by nearly $12 million in 2021 to more than $163 million, up about 8% year-over-year from 2020. That includes a one-time collection of about $32.5 million from a customer’s bankruptcy. Sales were 64% higher, which was more than enough to offset a 16% decrease in customers’ average prices, Centrus said.
In the same segment, Uranium revenue, or sales of natural uranium to traders and utilities, tumbled by almost half, sliding more than $16 million to nearly $23 million, representing a 42% decrease, for an overall decrease in the segment of 2% or $4.4 million to $186.1 million.
Overall, revenue for the Low-Enriched Uranium segment was about $186 million, down 2% or nearly $4.5 million, year-over-year.
In the Technical Services segment, revenue nearly doubled to more than $112 million, though more than a third of the increase was due to the pension settlement with DOE that the company booked in the third quarter. The segment is responsible for enrichment-technology development, including the cascade of AC100M centrifuges built at DOE’s Portsmouth Site near Piketon, Ohio, to make high assay low enriched uranium (HALEU) for DOE’s Office of Science.
Centrus’ demonstration contract will be curtailed after the COVID-19 response delayed delivery of government-furnished cylinders to Portsmouth, leaving the company unable to provide significant quantities of HALEU to DOE as quickly as the agency specified in 2019 in a contract option that now won’t be picked up.
Instead, the Department of Energy will write up, and put on the street, a new contract to deliver HALEU for government demonstration projects. The deal, which DOE expected to award in 2022, could last as long as 10 years, the agency said.
The contract has drawn Orano USA’s interest. The U.S. arm of the French-owned nuclear giant responded to DOE’s request for information about the planned HALEU contract and on Friday put out a press release about it.
The HALEU demonstration could give Centrus a leg up in the competition to provide U.S.-origin enriched uranium for future nuclear weapons programs at the National Nuclear Security Administration. The semiautonomous DOE weapons agency on Friday remained in a protracted search for a next-generation enrichment-services provider, with Centrus’ AC100M technology in a two-horse race with a smaller enrichment technology developed at the Oak Ridge National Laboratory.
The National Nuclear Security Administration says it cannot use foreign-origin uranium for any nuclear-weapon program. Others, inside and outside of government, have argued otherwise. Last year, the head of the agency’s defense programs office in Washington, Charles Verdon, said it would be a “big lift” to green-light the use of foreign uranium in, or in support of, U.S. nukes.
