Brian Bradley
WC Monitor
8/28/2015
Although Centrus lost $30.5 million during the first six months of 2015, including $15.1 million in the second quarter, the reopening of nuclear power plants in Japan in the wake of the 2011 Fukushima disaster provides hope for future profits. “To be sure, there’s still a long road ahead, but if nuclear generation continues to recover in Japan, it will be good news, not only for our industry, but more importantly, for the people of Japan, and for efforts to reduce carbon emissions,” Centrus CEO Dan Poneman said on Wednesday during a conference call with investors.
The March 2011 tsunami and radiological release at the Fukushima Daiichi reactor on Japan’s east coast prompted the government to shut down nuclear plants across the country. However, Tokyo recently started slowly bring the plants back online. Poneman said the Fukushima incident depressed the global nuclear fuel market, forcing Centrus to more intensively diversify its mix of suppliers. Centrus comprises of subsidiary USEC, which supplies global customers with low-enriched uranium, and American Centrifuge (AC), a group of subsidiaries established to develop Centrus’ centrifuge technology and to operate the American Centrifuge Plant. Poneman said the restart of Japanese reactor Sendai 1 two weeks ago should help the nuclear industry as well as Centrus’ nuclear fuel business.
The call came 2 ½ weeks after Centrus released its second-quarter earnings results, which showed a significantly lower revenue loss than in the corresponding quarterly and six-month periods of 2014. According to a Centrus press release, the company’s revenue loss was down 46 percent year over year for the second quarter (to $15.1 million), and 61 percent lower for the period from January to June (to $30.5 million). In March 2014, the company then known as USEC filed for Chapter 11 bankruptcy in March. Centrus completed its bankruptcy restructuring and changed its name on Sept. 30. Centrus had a cash balance of $218.5 million on June 30, and expects to retain $175 million to $200 million at the end of the year, according to the release.
Despite losing two-thirds of its workforce since 2013, Centrus has made savvy personnel moves and put itself in a position to succeed, Poneman said during the call. “Our costs are declining, our margins are improving, and our cash balance remains strong,” he said. “Having restructured our balance sheet last fall, we substantially reduced our debt so that we can better navigate the challenges of the current business environment, and we’re bringing in new leadership to reinvigorate our approach to customers and opportunities, and to drive our future growth.” Centrus announced two executive appointments on Monday: Kevin Alldred will become senior vice president of business strategy, effective Oct. 1, and Elmer Dyke will step into the position of senior vice president for business operations on Sept. 1. Centrus on July 24 promoted Stephen Greene, the company’s former treasurer and vice president of finance, to the position of CFO, senior vice president, and treasurer.
