Consolidated revenue rose 45% to $522 million in the fourth quarter of 2005, while our adjusted net earnings doubled to $74 million ($0.20 per share). The significant improvement in the results was due to higher earnings from BPLP and improved results in the uranium business.
The improvement was partially offset by higher expenses for administration and exploration. Our total costs for administration, exploration, interest and other were about $57 million, $16 million higher than 2004. Of this, administration costs were $12 million higher due to stock compensation charges primarily attributable to increased share prices ($4 million), charges for post-retirement benefits ($2 million), business development costs at Centerra ($1 million), and expenditures for regulatory compliance, business process improvements and workforce maintenance.
Exploration expenditures rose by $4 million to $18 million due to increased exploration activity in both the uranium and gold businesses. In uranium exploration, a $3 million increase in expenditures was related to programs in Saskatchewan, Australia and the Northwest Territories. In the gold business, Centerra increased its exploration expenditures by $1 million compared to 2004. The higher charges reflect increased gold exploration activity in the Kyrgyz Republic and Mongolia.
| ($ millions except per share amounts) | ||||||
| Three Months Ended Dec. 31/05 | Three Months Ended Dec. 31/04 | % change | ||||
|---|---|---|---|---|---|---|
| Revenue | 522 | 361 | 45 | |||
| Earnings from operations | 57 | 46 | 24 | |||
| Cash provided by operations1 | 91 | 59 | 54 | |||
| Net earnings | 81 | 37 | 119 | |||
| Earnings per share – basic2 | 0.23 | 0.10 | 130 | |||
| Earnings per share – diluted2 | 0.22 | 0.10 | 120 | |||
| Adjusted net earnings3 | 74 | 37 | 100 | |||
| 1 After working capital changes. | ||||||
| 2 Data reflects the stock split on February 17, 2006. | ||||||
| 3 2005 excludes a net gain of $7 million ($0.04 per share) related to the gain on sale of Energy Resources of Australia Ltd shares ($69 million) and the loss on the restructuring of the Bruce Power Limited Partnership ($62 million). | ||||||
During the fourth quarter, the company recorded a benefit related to a court decision finding that the resource surcharge paid to the Government of Saskatchewan was deductible in calculating federal and provincial taxable income. Previously, the surcharge had not been a tax-deductible expense. As a result, the company recorded a $10 million recovery of income tax expense.
Our effective tax rate, excluding adjustments, increased to 16% in the fourth quarter from 10% in the same period of 2004 due to a greater proportion of total income being taxable in Canada.
Earnings from operations were $57 million in the fourth quarter of 2005 compared to $46 million in 2004. The aggregate gross profit margin decreased to 22% from 24% in 2004.
For more information on the fourth quarter of 2005, refer to Cameco's news release dated January 31, 2006.