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Highlights
- Cameco announced a 33% increase in its annual dividend and raised its production outlook for 2024.
- Favorable market conditions have led to higher earnings projections and revenue estimates for the year.
- Production at JV Inkai has faced setbacks, but Cameco has adjusted logistics to meet commitments.
Cameco Corporation (TSX:CCO) has reported its third-quarter financial results for 2024, showing steady progress in revenue growth, increased uranium production forecasts, and a notable increase in its annual dividend. The Canadian uranium leader, publicly traded on the Toronto Stock Exchange and the New York Stock Exchange (NYSE:CCJ), announced a 2024 dividend of $0.16 per share, payable on December 13 to shareholders recorded as of November 27. The company is aiming for a dividend increase of at least $0.04 per share annually through 2026, which would effectively double its 2023 dividend. This dividend growth plan aligns with Cameco’s improving production and financial performance, especially as it resumes full operation at its premier uranium assets.
The financial results reflect both routine quarterly variations and delays in sales for its JV Inkai partnership due to transportation obstacles. However, Cameco maintained strong operating metrics in the uranium segment, with Q3 net earnings reaching $7 million and adjusted EBITDA hitting $308 million. For the first nine months of 2024, Cameco reported net earnings of $36 million, adjusted net earnings of $115 million, and adjusted EBITDA of $1 billion, bolstered by a strong uranium market and favorable exchange rates.
Based on a robust U.S. dollar, Cameco raised its 2024 revenue outlook to $3.01–$3.16 billion, an increase from its previous estimate of $2.85–$3.0 billion. In addition, it updated its average realized price expectation to $77.80 per pound of uranium, higher than the previous estimate of $74.70 per pound. Expectations for adjusted EBITDA from Cameco’s stake in Westinghouse have also increased to between $460 million and $530 million, reflecting optimistic projections for its uranium-based energy segment.
The uranium division demonstrated strong performance in the third quarter, with a 7.3 million-pound delivery and year-to-date deliveries totaling 20.8 million pounds. While this year’s delivery pattern varied from previous years, it remains consistent with Cameco’s annual forecast of 32–34 million pounds. Higher sales volumes and a favorable Canadian dollar exchange rate contributed to the growth in revenue and gross profits compared to the prior year.
Looking forward, Cameco has raised its 2024 uranium production outlook, aiming for up to 37 million pounds in total, with Cameco’s share estimated at 23.1 million pounds. This increased forecast is attributed to the consistent output at the Key Lake mill, now expected to produce 19 million pounds in 2024—up from an earlier target of 18 million pounds. This proactive stance enables Cameco to align its production with increased market demand and meet long-term contract commitments.
Despite this success, Cameco’s JV Inkai mine in Kazakhstan has experienced production challenges. Annual production is now expected to reach 7.7 million pounds (100% basis), down from the previous 8.3 million-pound target due to issues with sulfuric acid supply and other logistical complications. Nevertheless, a shipment of approximately 2.3 million pounds from Inkai has already arrived in Canada, and Cameco is actively working to meet its planned deliveries for the remainder of the year. Additionally, Cameco is expected to file an updated technical report on the Inkai mine under the NI 43-101 standards within 45 days, including revised projections for mineral reserves and production.
