URENCO Trading statement
25 January 2010
Net income increases; Progress on capacity expansion
Financial and operating update
The year 2009 is anticipated to deliver financial results in line with the company’s expectations, based on another year of strong business performance for URENCO.
Turnover and EBITDA are expected to be broadly in line with 2008. Net income will be significantly higher. The results 2009 are positively impacted as provisions for future decommissioning costs are estimated to be lower. Income from operating activities is expected to be higher.
Reported net income for 2009 is forecast to be significantly higher than in the previous year because of a lower depreciation charge expected following an extension of the useful lifetime assumption of URENCO’s core equipment, although the depreciating asset base significantly increased. In addition, there will be significantly lower net finance costs due to the capitalisation of borrowing costs (as required per IFRS as of 1 January 2009), mark to market of hedged positions and lower interest rates.
Capacity Expansion
URENCO’s expansion projects across sites in Europe and the US continued to progress throughout 2009, with approximately 1,200 tSW added by year-end, bringing total Group capacity to 12,200 tSW/a.
Expansion of URENCO’s Dutch site in Almelo progressed well, with the completion of Hall 5 and the start of construction for the installation of Hall 6. In the last quarter of 2009, the URENCO Board also approved further expansion at Almelo with extensions to both Halls 5 and 6. Construction at Almelo is expected to begin during the second half 2010. Operations at Separation Hall 2 in Gronau, Germany, began in 2009 following successful receipt of an operating licence.
The Group’s fourth enrichment plant, and its first in the US, is ready to start commercial operations subject to the receipt of US Nuclear Regulatory Committee (NRC) approval, expected early this year. In addition, modular expansion of the European plants will continue into 2010 and beyond in order to achieve a Group enrichment target of 18,000 tSW/a by 2015.
Last year also saw formal Board approval given for the construction of the Tails Management Facility (TMF) in Capenhurst, UK, which will treat URENCO’s depleted uranium tails, a by-product of the enrichment process. URENCO is committed to minimising the risk to the environment from tails and therefore URENCO will de-convert a significant part of this by-product through the TMF.
Balance Sheet
URENCO’s balance sheet remains strong. The Group undertook a number of successful funding transactions during the course of 2009 totalling €660 million. This included a new €350 million facility from the European Investment Bank. The Group also received a first time A+ long-term credit rating from Fitch and had its A1 Moody’s ratings and A- Standard & Poor’s rating re-affirmed
URENCO will continue to monitor the financial markets throughout 2010 so that it could benefit from funding opportunities when they emerge, in order to further strengthen its liquidity position.
Outlook
URENCO remains confident in the future, with a forward order book of €19.5 billion which extends beyond 2025. Demand for URENCO’s enrichment services has continued to show significant growth, providing the Group with strong revenue visibility for the foreseeable future.
During the course of 2010, URENCO will continue to pursue capacity expansion in order to meet the growing enrichment demands of its customer base. The year will include major milestones for URENCO with the start of commercial operations at its new US plant and the start of construction of the TMF.
URENCO expects Turnover and EBITDA to grow during 2010 and its financial position to remain strong, with steady growth across all key performance indicators.
URENCO will report financial results for the year ending 31 December 2009 on the 8 April 2010.
- Ends –
Investor contact:
Navreet Doad, Investor Relations, +44 (0) 1628 402279; navreet.doad@urenco.com
Media contact:
Jayne Hallett , Head of Group Communications, +44 (0) 1628 402297, jayne.hallett@urenco.com
Howard Lee or Dudley White, Headland Consultancy, +44 (0) 207 367 5225 / 5226, hlee@headlandconsultancy.co.uk, dwhite@headlandconsultancy.co.uk
The URENCO Group
URENCO is an independent international and technology group with its head office based in Marlow, UK. It operates plants in Germany, the Netherlands and the UK, and in the near future at a fourth site in New Mexico, US. It operates in a pivotal area of the nuclear fuel supply chain, which enables the sustainable generation of electricity for consumers around the world.
Utilising centrifuge technology, URENCO provides safe, cost-effective and reliable uranium enrichment services for civil power generation within a framework of high environmental, social and corporate responsibility standards. Currently URENCO fulfils around 25% of the global enrichment market, and the goal is to continue to build market share, with the aim of establishing URENCO as the leading global supplier of enrichment and enrichment technology.
www.urenco.com