Centrus Energy Corp., Bethesda, Md., posted a net loss for the first quarter, when a drop in the flagship fuel brokerage business wiped out a gain from other uranium sales and the continuing steadiness of an advanced enrichment contract, now in its final days, with the Department of Energy, the company said Friday.
Centrus lost $40 million, or 3 cents a share, in the first quarter, a precipitous drop compared with earnings of $5.1 million or 33 cents a share in the 2021 quarter. Company revenue fell more than 35% to about $35 million from more than $55.5 million a year ago.
A drop in Separative Work Unit sales, or sales of energy-generating uranium used by U.S. power plants, accounted for most of the lost revenue, with an almost a three-fold drop to just under $13 million from more than $38 million in the 2021 first quarter. That’s according to Centrus’ latest earnings press release, in which the company said both utility demand for fuel and the price paid for that fuel fell in the quarter, which ran from Jan. 1 to March 31.
The final days of first quarter coincided with the start of Russia’s invasion of Ukraine, which has made analysts jumpy about Centrus, a company whose bedrock business involves brokering foreign-sourced uranium, including uranium from Russia and its neighbors, to U.S. utilities.
In a conference call Friday, Centrus Chief Executive Officer Daniel Poneman, a former deputy secretary of energy in the Barack Obama administration, told investors that “prices have had an unprecedented rise in the last kind of couple of months,” and that he was “sure” the Russian invasion was the reason.
Still, Poneman said, “[w]e have not had any changes and no orders have been canceled” in the Separative Work Unit business, as of Friday.
Centrus does hope, however, that the uncertainty surrounding the international uranium market in the wake of Russia’s invasion and subsequent economic isolation from the west would drive a U.S. enrichment boom.
To that end, Poneman said, Centrus could use the space it is renting from the Department of Energy to build a small cascade of high assay, low-enriched uranium (HALEU) enrichment machines to enrich conventional low-enriched uranium for U.S. power plants.
The leased facility at the Portsmouth Site in Piketon, Ohio, has 16 HALEU enrichment machines in it now, but it could fit “thousands” of centrifuges to serve the domestic nuclear-power industry, Centrus wrote in its latest earnings press release.
As for the HALEU cascade, Centrus built it as part of an 80/20 cost-share contract with the Department of Energy. The deal, awarded in 2019, is now worth about $120 million. The COVID-19 pandemic delayed delivery of some DOE equipment, so the agency decided to cut the contract off before a planned enrichment demonstration that had been on the slate for this summer.
DOE still plans to use the Centrus cascade to enrich HALEU for a few advanced reactor demonstrations, but the enrichment now will be part of a separate contract that the agency planned to put on the street for bids by May.
