Cameco reported full-year revenue of $3.1bn, up 21%, and underlying cash profit (EBITDA) rose 73% to $1.5bn. Cash Profit benefited from a $0.5bn contribution from the 49% stake in Westinghouse, acquired in late 2023.
Performance was driven by the Uranium segment, which benefited from an 18% higher average realised price - the highest in over a decade under long-term contracts. Uranium production rose 33%, driven by record output at McArthur River/Key Lake, while sales volumes rose 5%.
Net debt improved from $1.3bn at the start of 2024 to $0.7bn by year-end, benefitting from free cash flow of $0.7bn.
An annual dividend of $0.16 per share was announced in November, and the board has proposed a plan to increase the dividend by at least $0.04 annually in 2025 and 2026.
2025 guidance points to revenue of $3.3-$3.6bn.
*Currency = Canadian Dollars
The US listing was up 1.6% in pre-market trading.
Our view
Full-year commentary continued to highlight improving trends. Cameco has benefitted from higher uranium pricing, ramping up production to take advantage of the shift in demand.
We would urge investors not to follow quarterly numbers like a hawk, the industry is inherently lumpy and contracts have tended to be long term in their nature.
Cameco is a company at the epicentre of the clean energy transition. This Canada-based giant is engaged in providing uranium fuel to generate clean, reliable baseload (the minimum amount of electric power needed to be supplied to the electrical grid at any given time) electricity around the globe. The company also offers nuclear fuel processing services, refinery services and it manufactures fuel assemblies and reactor components.
Attitudes towards nuclear energy show signs of shifting in Cameco’s favour. Policymakers are more proactively proposing nuclear as an important part of energy plans. In some cases, full-scale anti-nuclear stances are being reversed. We think the market is primed to grow from here. Not only because of the helpful megatrend of cleaner energy solutions, but because there is limited uranium supply coming online at a time when demand is increasing.
There are many reasons for this heightened demand. Geopolitical tensions and a desire to secure energy supply is one, but perhaps the bigger pushes are coming from the energy transition and the huge energy requirements needed to power the AI revolution.
Cameco is primed to benefit. It has several approved and built assets in less volatile regions ready to fire up. Almost 90% of uranium consumption is in countries with little-to-no primary production and Cameco has controlling ownership of one of the world’s largest high-grade uranium reserves.
The balance sheet is currently strong and with operations ramping back up, cash flows have improved too. That’s paved the way for an improved dividend program, though no shareholder returns are assured.
Cameco is exposed to political risk. We think policymakers will remain on a more nuclear-friendly course, but sentiment could change, which would then likely affect Cameco.
Ultimately, rising concern about energy supply and a re-evaluation of nuclear energy's role means we’re at an inflection point for uranium demand. Cameco is a well-placed name to capitalise on this, and high barriers to entry help keep competitors at bay. But ups and downs should be expected along the way and there are no guarantees.
Environmental, social and governance risk
Mining companies have high ESG risk. Emissions, effluents & waste and community relations are key risk drivers in this sector. Operational carbon emissions, resource use, health and safety, labour relations, and bribery and corruption are also contributors to ESG risk.
Cameco’s overall management of material ESG issues is strong.
There is board level responsibility for overseeing ESG issues, however, ESG reporting is not in accordance with leading reporting standards. Executive remuneration is explicitly linked to sustainability performance targets. Scope 1 and 2 emissions are disclosed and carbon intensity tracks below the industry average. There are also programmes in place to reduce own emissions, with targets and audits. Cameco has not been involved is any major community relations controversies.
Cameco key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
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