Half-Year 2007 Unaudited Financial Results
29 August 2007
Growing order book supports strong business performance and further expansion
Financial highlights
Strong business performance
- Turnover for the first six months was up 6% to €406 million compared with €382 million in the first half of 2006. This was in spite of a reduction in the proportion of Separative Work Unit (‘SWU’) deliveries made in the first half (SWU deliveries in the first half of 2006 were an unusually high proportion of the total for the year) and a weaker US dollar. These effects were more than offset by increased sales of surplus stocks of uranium feed.
- EBITDA of €217 million and Net Profit of €76 million were both only slightly higher than for the six months to 30 June 2006 (€214 million and €74 million respectively), reflecting higher startup costs of €22 million at the National Enrichment Facility (the “NEF”) in New Mexico,
United States. Before these startup costs, EBITDA and Net Profit
grew by 9% and 13% respectively.
Expanding order book underpins capital investment programme
- Continuing order book growth – URENCO’s order book stood at €19 billion at 30 June 2007 – a 26% increase compared with the 2006 yearend. Contractual commitments now extend beyond 2025, demonstrating customers’ continued confidence in URENCO as a reliable
longterm partner in the uranium enrichment market.
Increase in capital investments – URENCO continues to invest to ensure that sufficient longterm enrichment capacity is available to meet customer needs. As part of this ongoing plan, investments in the first six months were €200 million, significantly higher than in the first half of 2006 (€139 million). This increase was a result of the rampup of URENCO’s capacity expansion programmes in Europe and the startup of construction work at the NEF, US.
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Capacity expansion programme under way in Europe and US – Capacity expansion programmes are now under way at all European sites, with new capacity being installed at Capenhurst (UK), Almelo (the Netherlands) and Gronau (Germany).
At the NEF, the planned detailed review of plant design and licence requirements was completed in the first six months of the year, and construction started based on an optimised and simplified plant design. A major milestone was reached in June with the first pouring of structural concrete to US nuclear quality standards. First production from the NEF
remains scheduled for mid2009.
Strong financial position and active funding programme continue
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Increased operational cash flows – Cash generated from operations was €203 million in the first six months, slightly lower than for the first half of 2006 (€206 million), reflecting the slight increase in EBITDA offset by working capital movements. Internal cash generation continues to be the main source of funding for URENCO’s capital investment programme.
Funding activities continue – Further progress was made on the Group’s funding programme in the first half of the year, with additional sources of funding secured in order to replace maturing facilities and to fund URENCO’s capital investment programme.
In refinancing maturing private placement loans URENCO was able to conclude new private placements on attractive terms with longer maturities (10 years) in the US dollar market. In addition, agreement was reached with the European Investment Bank (EIB) for a loan of
€200 million, with the final tranche of this funding maturing after 17 years. The EIB approval process included a detailed review of URENCO’s business, and a particular focus on URENCO’s environmental performance and contribution to wider European energy policy aims.
For its future funding activities, URENCO will continue to look for financing opportunities in all relevant markets, including the longer maturity bond markets, for its important capital investment programme in Europe and the US.
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