Uranium fuel supplier Centrus Energy trimmed its losses in the first quarter of 2016, after which it officially began closing down the industrial-scale uranium enrichment demonstration known as the American Centrifuge Plant (ACP) in Piketon, Ohio.
The former United States Enrichment Corp. — which ceased enrichment operations in 2013, emerged from bankruptcy in 2014, and has since reinvented itself as a sort of fuel broker for commercial power plants — lost just over $14.5 million, or $1.60 a share, in the quarter ended March 31. That is somewhat better than a loss of just under $15.4 million, or about $1.70 a share, in the 2015 quarter, the Bethesda, Md.-based company announced Tuesday.
Quarterly revenue plummeted to about $90 million in the 2016 quarter from just over $165 million in the prior-year period, “reflecting the variability in timing of utility customer orders,” Centrus wrote in its latest earnings statement. Revenue was also hurt by the end of ACP operations in Piketon, though this was partially offset by the continuation of an ACP-related technology demonstration at the Department of Energy’s Oak Ridge Laboratory in Tennessee.
Centrus started ACP decontamination and decommissioning in Piketon in the second quarter of the year, which began April 1. The cleanup, and associated expenses, is expected to run through March 31, 2017, and could cost up to $60 million, according to Centrus’ Tuesday 10-Q filing with the Securities and Exchange Commission.
As it has said since February, when it made the end of ACP in Ohio official, Centrus plans to maintain a presence in Piketon.
“The company would like to preserve a core staff, expertise, and facilities at Piketon to enable the site to be used to support the company’s other business development initiatives as needed,” Centrus wrote in the 10-Q.
After a round of 60 layoffs completed March 4, there were about 150 Centrus workers left at the site. Most of these people were expected to remain on-site until decontamination and decommissioning is complete next year. Centrus estimates these layoffs will cost almost $9 million in termination benefits, a charge the company recognized in the third quarter of 2015.
Meanwhile, Centrus continues the much smaller ACP-related technology demonstration at Oak Ridge under a six-month subcontract finalized March 30 with DOE lab prime UT-Battelle and worth roughly $32 million. Battelle paid Centrus almost half the total up front in early April, according to a copy of the subcontract appended to the company’s latest 10-Q.
That included payback for work Centrus did on its own dime in the fourth quarter of 2015, the 10-Q says.
In the quarterly earnings call, CEO Daniel Poneman said Centrus anticipates $275 million to $300 million in revenue for the year, with nuclear fuel services providing $250 million to $275 million. The nuclear fuel business is growing, and is expected to remain Centrus’ prime segment for a number of years, but the company aims to broaden its offerings, he said.
Centrus anticipates having a $200 million to $250 million cash balance at the end of the year, Poneman said.
