A swap of common shares for preferred shares led to a $2.2-million first-quarter loss for Centrus Energy Corp.’s common shareholders, as revenue rose across the board, the Bethesda, Md.-based nuclear fuel reseller and enrichment technology developer wrote in its latest quarterly earnings report.
Centrus’ net income was $5.1 million for the three months ended March 31, down from $11.3 million in the year-ago quarter, but preferred stock dividends and earnings distributed to the holders of the now-retired preferred shares sapped quarterly net income by a combined $7.2 million, almost all of which was accounted for by retiring the preferred shares.
Ignoring the effect of the preferred share swap, Centrus said its adjusted net income attributable to common shareholders was $4.4 million, or 33 cents a share, down from $9.3 million, or 95 cents a share, a year ago.
Quarterly revenue was $55.6 million, up from $45 million a year ago, Centrus reported. Both the Separative Work Units business, which represents enriched uranium sold to utilities, and Technical Solutions, which develops new enrichment technology, bulked up their top lines for the quarter. Centrus’ third business unit, Uranium, sold no natural uranium in either quarter.
Separative Work Units posted revenue of $38.1 million, up from $30.7 million, while Technical Solutions brought in $17.5 million, up from $14.3 million, Centrus reported. Prices fell for separative work units even as the company moved more product. The segment’s cost of sales also rose, something the company attributed to moving more volume.
Centrus revenue can swing to extremes from quarter to quarter as utilities decide when to take delivery of nuclear fuel.
Technical Solutions, meanwhile, did more work under a pair of key contracts, including a Department of Energy contract to build a 16-machine enrichment cascade at the agency’s Portsmouth Site near Piketon, Ohio.
“It’s been really tough because the supply chain has had challenges because of COVID,” Daniel Poneman, Centrus’ CEO, said on a call with investors Wednesday morning. “But thankfully, we actually are on track and we’ve been working very well with our regulators and we have all 16 machines now for the demonstration cascade up and standing in Piketon, Ohio.”
Under the $115-million, 80-20 cost share deal DOE awarded in 2019, the centrifuges, built on the site of the company’s decommissioned American Centrifuge Project are supposed to produce the 19.75% enriched uranium product called high-assay, low-enriched uranium (HALEU). The machines are supposed to switch on by March 1, 2022, provide a HALEU sample to DOE by March 15, 2022 and produce at least 200 kilograms of HALEU by June 1, 2022.
HALEU could be used in advanced reactors, which the DOE is trying to jumpstart.
The National Nuclear Security Administration (NNSA) is considering whether to use Centrus’ AC100 technology as the cornerstone of the next domestic enrichment facility capable of producing unencumbered uranium for nuclear weapons. The NNSA needs a supply of uranium usable in the weapons program by the early 2040s, initially to help produce tritium in Tennessee Valley Authority reactors.
The NNSA was supposed to choose between the two technologies in January but instead postponed the decision — again — and refused to say when it might announce its preferred alternative: Centrus or the Oak Ridge technology.
In congressional testimony last week, Secretary of Energy Jennifer Granholm said she has asked the NNSA and DOE’s Office of Nuclear Energy “to take a look and see if there’s any efficiencies to be gained from working in tandem to develop that next generation of uranium enrichment.”
