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Half Year 2020 Unaudited Financial Results

06 August 2020

Urenco Group (“Urenco” or “the Group”), an international supplier of uranium enrichment services and nuclear fuel cycle products, today announces its results for the half year ended 30 June 2020.


  • Revenue down €187.3 million on H1 2019 (23.3% decrease) and EBITDA down €145.3 million (24.9% decrease) due primarily to lower levels of SWU deliveries to customers in the period.
  • Net income (pre-exceptional item) down by €75.2 million on H1 2019 (27.5% decrease) and Net income (post-exceptional item) down by €100.8 million (36.9% decrease).  
  • Cash generated from operating activities remained robust at €498.5 million in H1 2020 (7.6% increase on H1 2019).
  • Effective COVID-19 preparation, response and recovery plans, continuous plant operations and customer deliveries, while ensuring strong support to our employees, and no assistance from Government employment schemes.
  • No significant financial impact in the reporting period from COVID-19 pandemic; liquidity remains strong.
  • Contract order book has an approximate value of €10.2 billion (€10.6 billion as at 31 December 2019), providing continued visibility and financial stability of future revenues.

Financial highlights (€ million)


Six months to 30 June 2020 (unaudited)

Six months to 30 June 2019 (unaudited)

Revenue 617.3 804.6
EBITDA (i) 437.6 582.9
EBITDA margin - % 70.9% 72.4%
Income from operating activities (pre-exceptional item) 321.8 418.9
Exceptional item (pre-tax) (ii) (25.6) -
Income from operating activities (post-exceptional item) 296.2 418.9
Net income (pre-exceptional item) 198.3 273.5
Exceptional item (post-tax) (ii) (25.6) -
Net income (post-exceptional item) 172.7 273.5
Capital expenditure (iii) 68.3 54.2
Cash generated from operating activities 498.5 463.3

(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 net costs of nuclear provisions. EBITDA is reconciled to income from operating activities on pages 3 and 10.

(ii) Exceptional item comprises the increase in nuclear provisions for the USA operations as a result of lower discount rates.

(iii) Capital expenditure includes net cash flows from investing activities (excluding interest received) and capital accruals (included in working capital payables).

Boris Schucht, Chief Executive of Urenco Group, commenting on the half year results, said:

“Urenco’s half year results for 2020 reflect a robust financial and operational performance during a time of significant disruption globally, due to the COVID-19 pandemic.

Urenco acted quickly to mitigate the impact of the spread of the COVID-19 virus on our business. Our objective has been to ensure the safety and wellbeing of our employees, their families and the local communities, and the continued safe operation of our sites. We have had a very low infection rate among our employees. We achieved continuous, smooth operations across all sites, and there was no interruption to either our supply chain or logistics. We maintained our 100% record of delivering to our customers on time. For this, I extend a huge thank you to our employees and partner organisations.

Urenco’s finances remain healthy, despite the pandemic. We benefit from a strong balance sheet, with more than €790 million in cash and short term deposits, as well as €750 million of undrawn bank facilities, which can help buffer and protect us from any potential longer term adverse consequences of the COVID-19 virus. Some of our customers are being impacted by a drop in electricity consumption, which may lead to a small reduction in deliveries for Urenco in the coming years. Our results in the past six months have remained in line with management expectations.

Sustainability is integral to everything Urenco does, in terms of the longevity of our company, our environmental impact and how we give back to society. The past six months have seen some very positive progress commercially, with new enrichment and nuclear stewardship contracts secured. In relation to environmental impact, the commissioning of our Tails Management Facility is progressing well and represents a significant investment in the responsible management of the by-product of our enrichment services. Our stable isotopes business has huge value for society, from diagnostics, therapy and pain relief to supporting the development of quantum computers. We are increasing its capacity and are looking forward to officially opening an enhanced facility next year, following completion of commissioning.

During 2020, we are celebrating the 50th anniversary of our organisation’s founding treaty – The Treaty of Almelo. Our success is due to the skill and commitment of our employees and the strong relationships we have with a wide variety of trusted and valued partners. This has been even more evident during the COVID-19 crisis and we look forward to continued collaboration to help ensure our industry continues to perform in these turbulent times.”


Urenco has detailed procedures in place to ensure the safety and wellbeing of our employees, communities and key stakeholders, and our ability to keep our plants operating.

Dedicated teams have been managing the risk, closely monitoring local conditions and government advice, and delivering on comprehensive response plans. International business travel ceased quickly. Visitor tours of our sites were cancelled and employees who could work from home were required to do so. Increased hygiene measures were implemented at all sites. Guidance was issued to managers and supervisors, and employees were updated daily on what actions needed to be taken.

We also worked closely with suppliers and business partners to mitigate the associated risks. Additional stock was put in place for critical components and we sourced alternative products where there were shortages of supply.

These measures will remain in place for the time being, with restrictions being eased gradually in line with Government guidance. We remain confident about our plans for managing COVID-19 and our resilience is further strengthened by our ability to provide services for our customers from our sites in mainland Europe, the UK and the USA.

Financial Results

Revenue for the six months ended 30 June 2020 was €617.3 million, a decrease of €187.3 million (23.3%) on the €804.6 million for the same period last year. SWU revenues were down, in line with management expectations, by €219.4 million, due to lower volumes, which more than offset the favourable impact from slightly higher realised hedged SWU prices. Uranium related sales were down by €24.1 million, with both volumes and prices lower than the same period last year.

Other net movements in revenue showed an increase of €56.2 million compared to the same period last year, of which €44.5 million relates to payments received associated with the settlement of claims filed by Urenco relating to the Chapter 11 bankruptcy of a US customer.

Overall, revenue for 2020 is expected to show that the second half of the year will account for a greater proportion of the total, which contrasts slightly with 2019 when sales were more broadly split across the first and second halves of the year.

EBITDA for the first half of 2020 was €437.6 million, a decrease of €145.3 million (24.9%) from the same period last year (H1 2019: €582.9 million), corresponding to an EBITDA margin of 70.9% (H1 2019: 72.4%). The decrease in EBITDA is principally due to the margin impact from decreased revenue, together with an increase in the net costs of nuclear provisions (excluding exceptional item) of €18.9 million, despite other operating and administrative expenses being lower by €60.9 million.

€ million (periods ending 30 June)

  2020 2019 % movement
Income from operating activities – pre-exceptional item 321.8 418.9 (23.2%)
Adjustment for depreciation in inventories, SWU assets and nuclear provisions (33.4) (6.3)  
Add: depreciation and amortisation 150.4 171.4  
Adjustment for share of results of joint venture (1.2) (1.1)  
EBITDA 437.6 582.9 (24.9%)

The net costs of nuclear provisions (including exceptional item) were €62.5 million for the six months ended 30 June 2020, an increase of €44.5 million (H1 2019: €18.0 million), primarily as a result of higher net costs for tails provisions. 

The net costs for tails provisions (including exceptional item) in the first half of 2020 were €50.8 million higher than those for the same period last year, with the increase due to a reduction in certain applicable discount rates and the relative impact of the reduction in higher assay tails associated with enrichment services contracts. The impact of the reduction in certain applicable discount rates, which relates to the US and the Netherlands businesses, resulted in a charge of €32.4 million (H1 2019: nil), of which the €25.6 million associated with the US discount rate change has been treated as an exceptional item. The Group’s policy on exceptional items requires separate disclosure for certain items of financial performance, due to their size, nature and incidence, so as to assist in understanding the underlying financial performance achieved by the Group. As the Group’s assumptions for the US business discount rate have remained unchanged for many years, and the impact of the change is material, it has been treated as an exceptional item due to its size, nature and incidence.

€ million (periods ending 30 June)

  2020 2019 increase/(decrease)
Net costs for nuclear provisions in the period – total 62.5 18.0 44.5
Net costs for tails provisions in the period – exceptional item 25.6 - 25.6
Net costs for nuclear provisions in the period – ordinary course 36.9 18.0 18.9

The net costs for decommissioning provisions in the first half of 2020 increased by €2.6 million. The net costs for other nuclear provisions in the first half of 2019 decreased by €8.9 million as a result of optimisation of the operations and changes to the forecasts for future re-enrichment of low assay feed.

Other operating and administrative expenses in H1 2020 were lower by €60.9 million (H1 2020: €142.8 million, H1 2019: €203.7 million). This movement reflects a lower average unit cost of sales, as a result of the sales mix realised in the period and the continued management of costs across our business. In addition, Other expenses are also net of the release of a provision of €17.4m, initially recognised in 2018, associated with the potential clawback of revenues by a US customer as a result of Chapter 11 bankruptcy proceedings which have now been completed.

Depreciation and amortisation for the six months ended 30 June 2020 was €150.4 million, compared to €171.4 million for the half year 2019, primarily reflecting lower depreciation on the US operations as a result of the impairment taken at the end of 2019.

Income from operating activities post-exceptional item was €296.2 million (2019: €418.9 million) and Income from operating activities pre-exceptional item was €321.8 million (2019: €418.9 million).

Net finance costs for the six months ended 30 June 2020 were €44.0 million, compared to €51.4 million for the same period last year. The net finance costs on borrowings (including the impact of interest rate/cross currency interest rate swaps) were lower at €34.6 million (H1 2019: €45.0 million), due to the premium of €9.9 million paid in January 2019 on the early redemption of certain bonds due in February 2021, with the underlying costs reflecting the lower levels of net debt in the first half of 2020.

In the first half of 2020, the tax expense was €79.5 million (an effective tax rate (ETR) of 31.5%), a decrease of €14.5 million over the tax expense of €94.0 million for H1 2019 (ETR: 25.6%). The decrease in tax expense arose primarily as a result of the decrease in accounting income before tax (including the impact of the exceptional item which resulted in a net tax credit of €nil million), together with a deferred tax valuation allowance release, partially offset by changes in the amount of foreign exchange financing gains and losses that are excluded from tax under the UK Disregard Regulations and a non-recurring tax expense for revaluing the Group’s UK deferred tax liability, following an increase in the UK tax rate to 19%.

In the first six months of 2020, net income post-exceptional item was €172.7 million, a decrease of €100.8 million (36.9%) compared to net income of €273.5 million in the same period of 2019. The decrease in net income post-exceptional item reflects the impact of lower EBITDA, despite the favourable impacts from lower depreciation, net finance costs and tax expenses. Net income pre-exceptional items was €198.3 million (27.5% decrease on H1 2019).

The net income margin for H1 2020 was 28.0% post-exceptional item and 32.1% pre-exceptional item (H1 2019: 34.0%).

€ million (periods ending 30 June)



2019 increase/(decrease)
Net income – pre-exceptional item 198.3 273.5 (75.2)
Exceptional item – change in US discount rate (25.6) - (25.6)
Net income – post-exceptional item 172.7 273.5 (100.8)

Operating cash flow before movements in working capital was €465.6 million (H1 2019: €593.1 million) and cash generated from operating activities was €498.5 million (H1 2019: €463.3million). The higher cash flows from operating activities primarily reflect the impact of lower revenues being more than offset by a favourable movement in working capital compared to H1 2019.

Tax paid in the period was €93.5 million (H1 2019: €112.2 million), with the decrease principally driven by lower tax payments in the UK and the Netherlands.

Accordingly, net cash flow from operating activities after tax was €405.5 million, compared to €351.1 million in H1 2019.

In the first six months of 2020, the Group invested a total of €68.3 million (H1 2019: €54.2 million), of which the investment in the Tails Management Facility (TMF) represented €17.3 million (H1 2019: €20.6 million). The level of investment spend in H1 2020 was higher than H1 2019 but lower than anticipated by management for both core enrichment assets and the TMF, primarily as a result of COVID-19 and the corresponding restrictions on our ability to safely carry out work.

Net cash outflow from financing activities in H1 2020 was €257.6 million, compared to €753.2 million in H1 2019. The figure for 2020 includes the termination of €95.1 million of short term deposits. The figure for 2019 includes the placement of €175.0 million in short term deposits (the majority of which matured in March 2020) and the repurchase of €215.6 million of our €750.0 million bond due in February 2021 for a total amount, including accrued interest, of €230.5 million. In March 2020, €300.0 million in dividends for the year ended 31 December 2019 were paid to shareholders (2019: €300.0 million).

As at 30 June 2020, the Group held cash and cash equivalents of €422.6 million (31 December 2019: €323.2 million) and short term deposits of €369.0 million (31 December 2019: €464.1 million). Net debt was €923.6 million (31 December 2019: €928.1 million), a decrease of €4.5 million from the year-end, as the net cash inflow from operating activities was higher than the overall movement in cash outflows relating to capital expenditure, net interest paid, the impact of the movement in lease liabilities and the payment of the final dividend for 2019.

Total provisions as at 30 June 2020 were €2,224.8 million (31 December 2019: €2,187.0 million), of which €6.4 million (31 December 2019: €9.2 million) was included in current liabilities. In H1 2020, additional provisions and the unwinding of discounts were €247.9 million, while utilisation and release of provisions (including exchange differences) were €210.1 million. Nuclear liabilities and the associated provisions, together with underlying macro economic assumptions and the required funding capability, are kept under constant review by Urenco.

Events after the Balance Sheet Date

The Group repurchased and cancelled €95.0 million of the August 2022 Eurobonds for a price of 103.35% (€98.2 million). This transaction was completed on 6 July 2020 for a total amount of €100.1 million, which included €1.9 million of accrued interest on these Eurobonds. A nominal amount of €405.0 million remains outstanding. As the tender offer for the Eurobonds was not finalised until after the period end, management has concluded that this constitutes a non-adjusting post balance sheet event and, therefore, it has not been recognised in the Group’s interim financial statements for the period ended 30 June 2020.

Outlook and Order Book

The COVID-19 crisis has impacted power markets and power demand globally, although it is increasingly apparent that nuclear output has remained a reliable source of energy during this time. Some markets are more impacted than others, with Europe seeing the largest fall in nuclear output compared to last year (between 10-15% lower in Q1 and Q2). While there may be a corresponding small reduction in deliveries in the coming years, many utilities are using the decreased demand as an opportunity to advance maintenance programmes.

During the first six months of 2020, SWU prices remain at similar levels to last year and uranium prices have increased to above $105/kg UF6, primarily as a result of the temporary closure of mines across the world in response to COVID-19. The historic levels of SWU pricing continue to be reflected in the value of our contract order book, which extends to the 2030s with a value as at 30 June 2020 of €10.2 billion, based on €/$ of 1: 1.12 (31 December 2019: approximately €10.6 billion based on €/$ of 1: 1.12). However, the current and recent levels of long-term forecast market prices for SWU are much lower than the historic levels of our order book and those previously anticipated, and this was the key driver which resulted in impairment charges being incurred on our US operations in both 2016 and 2019, totalling approximately €1.3 billion.

Future opportunities are created by the radical decarbonisation required to mitigate climate change and meet the commitments made in relation to the Paris Agreement. It is well established that in order to meet future emission targets, a mix of renewable and nuclear power is needed. It is vital for nuclear to complement renewables in the future energy mix, as it is the only proven technology providing continuous low carbon power. The nuclear industry requires a cost effective and diverse supply of uranium enrichment services as an integral part of the nuclear fuel cycle. Urenco has a key role in providing this as a leading nuclear services technology company operating safely and reliably for 50 years.

We also continue to monitor the various political uncertainties that could impact our business.

We are prepared for the UK’s full withdrawal from the European Union and EURATOM treaty, which is due to take place at the end of 2020.

In the United States, Urenco welcomed the US Department of Energy’s publication of the Nuclear Fuel Working Group’s report in April. Its recommendations included continuing to control the level of enriched uranium Russia can supply into the US. We also welcomed the recommendation on funding research and development of next generation fuels – a future market which Urenco is well placed to serve.


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

Click here to view the full Interim Financial Statements 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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