Bethesda, Md.-based uranium broker Centrus Energy reported mixed results in its earnings for the third quarter, seeing a gain in its quarterly income, but a decrease in net revenue.
Net income for the third quarter ended Sept. 30 was $31.6 million, or about $1.53 a share, up from $3.9 million, or $0.21 a share, in the year-ago quarter. Centrus said in its Wednesday earnings report the near $28 million increase was driven by “a $46.4 million gain recognized from the fair value adjustment of warrant liabilities during the current period and an increase of $4.0 million in investment income.”
Quarterly revenue, on the other hand, was approximately $55.5 million, a drop from $74.9 million a year ago. Much of the revenue decrease came from Centrus’ low-enriched uranium (LEU) segment.
The company’s LEU segment was $31.8 million, a decrease from $44.8 million in the year-ago quarter. This was attributed to a drop in the volume of uranium sold. However, Centrus’ separative work units – or SWU – revenue increased to $14.1 million in this year’s quarter over last year’s quarter of $10.7 million.
Centrus’ other segment of technical solutions, which includes its high-assay low-enriched uranium (HALEU) work for the Department of Energy and other technical services, took a hit. The technical solutions segment was $23.7 million, down from $30.1 million in the year-ago quarter.
During the investor call held on Thursday morning, Centrus CEO Amir Vexler said the market demand for HALEU is growing. Much of Centrus’ current backlog and work is rooted in LEU, Vexler said, but the company has signed a handful of HALEU contracts with advanced reactor companies, such as Radiant Nuclear and Antares Nuclear.
“This market’s demand represents an incremental growth opportunity that continues to mature,” Vexler said during the call. “We have positioned ourselves to capitalize on this potential market, if and when it matures, to provide ourselves with further optionality. This optionality includes our flexibility to use plant HALEU capacity for various assays of LEU and LEU+.”
HALEU’s growing market demand comes as Centrus is now using its 16-centrifuge cascades to enrich HALEU for the commercial market, making it the first U.S.-owned commercial enricher since the gaseous diffusion days, Vexler said. Centrus has been contracted by DOE to build a demonstration HALEU program for several years.
Vexler touted the demonstration program as successful so far and is in discussions with DOE about “how to amend [it] and how to make a more wholesome agreement where this continues to serve the market.”
While the third quarter ended on Sept. 30, in October, Centrus acquired a manufacturing supplier, Westerman Holdings, and shipped its first new centrifuge up to its Piketon, Ohio uranium enrichment as a part of the facility’s multibillion expansion project.
