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Full Year 2017 Audited Financial Results

07 March 2018

Increase in Revenue and EBITDA supported by our established contract order book

Urenco Group (“Urenco” or “the Group”), an international supplier of uranium enrichment services and nuclear fuel cycle products, today announces its results for the full year ended 31 December 2017.


  • Increase in revenue (€1,926.9 million, up 1.8% year-on-year) and EBITDA (€1,249.5 million, up 6.8% year-on-year) supported by established contract order book.
  • Net income benefitting from lower depreciation charges and lower finance costs due to lower levels of foreign exchange volatility.
  • Continued strong operating cash generation of €1,314.1 million and reduction in net debt to €2,104.7 million.
  • Contract order book extending to the second half of the next decade with an approximate value of €12.7 billion, providing protection in the short to medium term against prevailing market challenges and pricing pressures.
  • Commissioning of UK Tails Management Facility (TMF) expected in late 2018, following construction delays.
  • Long-term strategy implementation progressing well with cost reductions on target to achieve €300 million in cumulative cash savings by the end of 2019.

Financial highlights (€‘m)

  2017 2016
Revenue 1,926.9 1,893.0

EBITDA (i), (ii)



EBITDA margin % 64.8% 61.8%
Income from operating activities (pre-exceptional items) 871.8 693.2
Exceptional items pre-tax (ii) - (793.0)

Income / (loss) from operating activities (post-exceptional items)

871.8 (99.8)
Net income / (loss) 514.9 (456.3)
Earnings per share 3.1 (2.7)
Capital expenditure 299.3 407.6
Cash generated from operating activities 1,314.1 1,226.0

(i) EBITDA is earnings before exceptional items, interest (including other finance costs), taxation, depreciation and amortisation and joint venture results. Depreciation and amortisation are adjusted to remove elements of such charges included in changes to inventories and other expenses.
(ii) Exceptional items pre-tax comprise impairment of the USA operations (€760.0m) and restructuring provisions (€33.0m).

Dr Thomas Haeberle, Chief Executive of Urenco, commenting on the full year results, said:

“In 2017, Urenco delivered a good operational performance, strong financial results, and an improved safety performance following reduced lost time incidents. EBITDA was up, reflecting an increased level of sales and lower operating and administrative expenses. There was an increase in net income as a result of lower depreciation charges and lower finance costs.

We are continuing to optimise our business to mitigate against the pricing and demand challenges in the global enrichment market together with political uncertainties in the UK and Germany. As we complete our strategy’s initial implementation period we are on track to achieve €300 million in cumulative cash savings by the end of 2019. We are also pursuing growth opportunities in new markets, expanding our technical capabilities and broadening our services to the nuclear industry.

We have maintained our 100% record for customer deliveries, our 2017 employee survey showed a highly committed and engaged workforce, and 95% of stakeholders who responded to our 2017 reputation review had a very good or good opinion of Urenco.

The enrichment market may be challenging, but global demand for a continuous and secure supply of low carbon energy means we are optimistic that the civil nuclear industry will continue to grow. We are well placed to meet this increased demand due to the expertise and high level of engagement of our people, our secure and diverse supply, and our flexibility to reliably provide our customers with their essential products”

Financial Results

Revenue for the year ended 31 December 2017 was €1,926.9 million, an increase of 1.8% on the €1,893.0 million in 2016. SWU revenues after currency hedges were down by €1.5 million and uranium related sales were lower by €16.7 million. For both SWU revenues and uranium related sales, the benefits from higher volumes were more than offset by the impact of lower average unit revenues. Other net movements in revenue increased by €52.1 million compared to 2016, primarily as a result of net fair value gains associated with uranium related commodity contracts and higher sales at Urenco Nuclear Stewardship.

EBITDA for 2017 was €1,249.5 million, an increase of 6.8% over €1,170.0 million in 2016. This resulted from increased revenue, lower other operating and administrative expenses and slightly higher net costs for tails provisions.

Other operating and administrative expenses were €48.2 million lower than in 2016 reflecting improved operations from the implementation of our strategy and a credit of €15.6 million on the closure of the UK defined benefit pension scheme to further accrual.

The net costs for tails provisions were €2.6 million higher in 2017 compared to 2016. This was due to €59.6 million higher costs of new tails provisions created, offset by €57.0 million higher releases from the tails provision. The cost of new tails provisions created of €199.2 million were higher than the costs of €139.6 million in 2016, largely driven by new tails generated during the year and an increase in tails deconversion costs. There was a €85.3 million release from the tails provisions (2016: €28.3 million) following a review of underlying assumptions, optimisation of operations and the impact of the reduction in higher assay tails associated with enrichment services contracts.

The EBITDA margin for 2017 was 64.8% (2016: 61.8%) reflecting the benefits of net fair value gains on commodity contracts and lower operating costs, which more than offset the adverse impact of the increased net tails provisions and the higher proportion of lower margin uranium related sales in 2017.

Depreciation and amortisation for 2017 was €343.3 million, a decrease of €146.1 million on the charge of €489.4 million for 2016. This was the result of two key factors: lower depreciation on the USA operations as a result of the €760.0 million pre-tax impairment charge taken in 2016; and an increase in the estimated useful life of centrifuges and associated equipment across all enrichment sites.

Income from operating activities before exceptional items for 2017 increased by €178.6 million to €871.8 million compared to last year (2016: €693.2 million before exceptional items; €(99.8) million after exceptional items).

In 2017 there were no exceptional items compared to the €793.0 million pre-tax loss reported in 2016. The exceptional items in 2016 comprised an impairment of the carrying value of the USA operations of €760.0 million and a restructuring provision of €33.0 million.

Net finance costs for 2017 were €140.1 million, compared to €272.0 million for 2016. In 2017 the impact of the retranslation of unhedged loan balances was a loss of €10.3 million (2016: €110.2 million loss) reflecting increased hedging and lower foreign exchange movements. In addition, a gain associated with ineffective cash flow hedges was incurred of €5.5 million (2016: €16.6 million loss). The net finance costs on borrowings (including the impact of interest rate/cross currency interest rate swaps) were lower at €127.7 million (2016: €134.8 million) reflecting lower levels of net debt in 2017.

In 2017 the tax expense was €216.8 million (an effective tax rate (ETR) of 29.6%) an increase of €79.4 million over the pre-exceptional tax expense of €137.4 million for 2016 (ETR: 32.6%). The tax expense for 2017 includes a credit of €74.0 million related to previously unrecognised US deferred tax assets resulting from the impact that the increase in lifetimes of centrifuges and associated equipment will have on future depreciation. There is also a deferred tax charge of €85.1 million from the write down of previously recognised US deferred tax assets which have been revalued to reflect a reduction in average US Federal and New Mexico state corporate tax rates from 38.84% to 25.66%, effective from 1 January 2018.

Excluding the impacts of the deferred tax items, the tax charge would have been €205.7 million (ETR: 28.1%) compared to the pre-exceptional tax expense of €137.4 million for 2016 (ETR: 32.6%). The decrease in the ETR is being driven by three factors: i) changes in the relative proportions of profits and losses generated across the four jurisdictions in which Urenco operates; ii) impact of non-taxable and non-deductible amounts, including foreign exchange financing gains and losses that are excluded from tax under the UK disregard regulations; and iii) the impact of adjustments in respect of prior years.

In 2017 net income was €514.9 million an increase of €231.1 million compared to 2016 net income before exceptional items of €283.8 million (2016 net loss post exceptional items: €456.3 million). The net income margin for 2017 was 26.7% compared to the 2016 net income margin before exceptional items of 15.0%. This increase in net income is attributable to the impact of the increased EBITDA, lower depreciation costs and lower net finance costs which more than offset a higher income tax expense.

Cash flow

Operating cash flows before movements in working capital was €1,188.3 million (2016: €1,242.2 million) and cash generated from operating activities was €1,314.1 million (2016: €1,226.0 million). This was a result of higher revenues, lower operating costs and a favourable net working capital movement offset by increased spending on the deconversion, storage and disposal of tails during 2017.

Tax paid in the period was €122.9 million (2016: €117.1 million). Net cash flows from operating activities were €1,191.2 million (2016: €1,108.9 million).

The Group invested a total of €299.3 million in 2017 (2016: €407.6 million), reflecting a lower level of expenditure on core enrichment assets following completion of the US plant and the ongoing investment in TMF of €184.4 million (2016: €229.0 million). As reported in the 2017 interim results, the TMF has experienced construction delays and continues to face risks in terms of schedule and final cost. As a result, commissioning of the facility is forecast for late 2018. Capital expenditure is expected to fall further in future years following the completion of the TMF and lower investment required in new enrichment activity.

Capital structure and funding

Net debt decreased to €2,104.7 million (2016: €2,618.3 million). The Group’s net debt to total asset ratio remained strong at 32.9% (2016: 36.6%) well within the Group’s target ratio of less than 60%.

In May 2017, €362.3 million of euro bonds were repaid at maturity and a term loan of €112.4 million was repaid in December 2017. Urenco prepaid €319.6 million of EIB debt in December 2017 with the remaining €100 million loan maturing in March 2018. New one year bilateral loans have been arranged, each of €90 million, with four of Urenco's relationship banks. The maturity of the five-year €750 million revolving credit facility signed in 2016 has been extended to 2022.

The Group’s debt is rated by Moody’s (Baa1/Stable) and Standard & Poor’s (BBB+/Stable), these external ratings were unchanged during 2017.

In 2017 the final dividend for the year ended 31 December 2016 of €300.0 million was paid (dividend paid in 2016 for the year ended 31 December 2015: €350.0 million). The final dividend for 2017 of €300.0 million has been approved and will be paid to shareholders on 26 March 2018.

Order Book

Our order book contains orders extending to the second half of the next decade. The value of Urenco's order book at 31 December 2017 was approximately €12.7 billion based on €/$ of 1 : 1.20 (2016: approximately €15.5 billion based on €/$ of 1 : 1.05).


Urenco's long-term strategy is to broaden the range of services it offers while remaining a reliable and sustainable partner to the global nuclear industry, providing customers with the highest level of service, quality and expertise.

Urenco's established contract order book continues to provide long-term visibility and financial stability of future revenues. This provides protection in the medium term against prevailing pricing pressures and market conditions. However, the presence of excess inventories of enriched uranium product is contributing to market pricing pressures. If sustained into the middle and long term, the Group could experience lower profit margins and reduced cash flow. Urenco is confident that through the implementation of its strategy it will deliver sustained commercial success. Urenco also remains confident that the global nuclear industry will grow and that the Group is well-positioned to support it for years to come.

The principal risks and uncertainties to which Urenco is exposed are disclosed in the annual financial statements for the year ended 31 December 2017 and these are broadly the same as those disclosed in 2016.

The UK’s exit from the European Union and Euratom presents significant uncertainty for Urenco's business and we continue to work with the UK Government to ensure an orderly transition. The Group’s geographical diversity – with enrichment facilities in Germany, the Netherlands, the UK and the USA – means our business is well placed to continue to deliver on its commitments to customers.


Click here to view the full press release as a PDF.


About Urenco

Urenco is an international supplier of enrichment services and fuel cycle products with sustainability at the core of its business. Operating in a pivotal area of the nuclear fuel supply chain for 50 years, Urenco facilitates zero carbon electricity generation for consumers around the world.

With its head office near London, UK, Urenco’s global presence ensures diversity and security of supply for customers through enrichment facilities in Germany, the Netherlands, the UK and the USA. Using centrifuge technology designed and developed by Urenco, and through the expertise of our people, the Urenco Group provides safe, cost effective and reliable services; operating within a framework of high environmental, social and governance standards, complementing international safeguards.

Urenco is committed to continued investment in the responsible management of nuclear materials; innovation activities with clear sustainability benefits, such as nuclear medicine, industrial efficiency and research; and nurturing the next generation of scientists and engineers.


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