NUKEM

Highlights 2014  2013  Change
  1. 1 Includes sales of 1.1 million pounds and revenue of $43 million between our uranium, fuel services and NUKEM segments.
  2. 2 Includes sales of 0.6 million pounds and revenue of $23 million between our uranium, fuel services and NUKEM segments.
  3. 3 Adjustments relate to unrealized gains and losses on foreign currency forward sales contracts (non-IFRS measure).
Uranium sales (million lbs) 8.1 1  8.9 2  (9)%
Average realized price ($Cdn/lb) 44.90  42.26  6%
Cost of product sold (including D&A) 327  445  (27)%
Revenue 349 1  465 2  (25)%
Gross Profit 22  20  10%
Net earnings (3) 7  (143)%
Adjustment on derivatives 3 2  (3) 167%
NUKEM inventory write-down (reversal) (net of tax) (4) 10  (140)%
Adjusted net earnings (loss) 3 (5) 14  (136)%

During 2014, NUKEM delivered 8.1 million pounds of uranium, a decrease of 0.8 million pounds compared to the previous year due to weak market conditions. Revenues from NUKEM amounted to $349 million, 25% lower than in 2013 as a result of lower sales volume and a decline in the realized price amid lower market prices.

Gross profit amounted to $22 million, an increase of $2 million compared to 2013. Although sales volumes decreased, NUKEM’s gross margin increased by 10% compared to 2013 due to generally higher margin sales and a $14 million inventory write-down in 2013. On a percentage basis, gross profits were 6% in 2014 compared to 4% in the prior year.

After administration costs, interest and income taxes, adjusted net earnings amounted to a loss of $5 million compared to earnings of $14 million in 2013 (non-IFRS measures).

Outlook for 2015

For 2015, NUKEM expects to deliver between 7 million and 8 million pounds of uranium, resulting in an increase in revenues not including intersegment sales of 5% to 10% compared to 2014. NUKEM expects to incur administration costs up to 5% lower than in 2014. The effective income tax rate is expected to remain in the range of 30% to 35%.