Cameco Corporation CEO Discusses Q3 2010 Results – Earnings Call Transcript
Cameco Corporation (
)
Q3 2010 Earnings Conference Call
November 8, 2010 11:00 AM ET
Executives
Bob Lille – Director, IR
Gerry Grandey – CEO
Kim Goheen – SVP and CFO
Analysts
Orest Wowkadow – Cannacord Genuity
Martin Lafiane [ph] – Macquarie
David Snow – Energy Equities, Inc.
Terrance Ordland – TSO and Associates
Greg Barnes – TD Newcrest
Borden Putnam – Mione Capital
Lorne Smith – Scotia Capital
Presentation
Operator
Compare to:
Previous Statements by CCJ
»
Cameco Corporation Q2 2010 Earnings Call Transcript
»
Cameco Corporation Q4 2008 Earnings Call Transcript
»
Cameco Q3 2007 Earnings Call Transcript
»
Cameco Q2 2007 Earnings Call Transcript
Good day ladies and gentlemen. Welcome to the Cameco Corporation third quarter conference call. I would now like to turn the meeting over to Mr. Bob Lille, Director of Investor Relations. Please go ahead Mr. Lille.
Bob Lille
Thank you operator and good morning everyone. Welcome to Cameco’s third quarter conference call to discuss the financial results. Thank you for joining us.
With us today are four of Cameco’s senior executives. They are Gerry Grandey, Chief Executive Officer; Kim Coheen, Senior Vice President and CFO; Bob Steane, Senior Vice President and Chief Operating Officer; and Grant Assie, Senior Vice President, Corporate Services. Also with us today is our Colleague Rochel Girard, Manager, Investor Relations.
We’ll start with Gerry and Kim providing comments on the quarter’s business results, updates on our operations and development projects as well our plans to transition to international financial reporting standards next year. Then, we’ll open it up for your questions. Today’s conference call is open to all members of the investment community including the media. During the Q&A session, please limit yourself to two questions and then return to the queue.
Please note that this conference call will include forward-looking information which is based on a number of assumptions and actual results could differ materially. Please refer to our annual information form and MD&A for more information about the factors that could cause these different results and the assumptions we have made.
With that, I’ll turn it over to Gerry.
Gerry Grandey
Okay, thank you Bob and let me add my welcome to everyone for today’s conference call. Cameco’s third quarter results released earlier today are consistent with our projections from earlier in the year, and we indicated second half Uranium deliveries would be back end loaded to the fourth quarter. Based on these expectations, our net profit per share in the third quarter met market expectations.
While Uranium sales in the third quarter were lower compared to a year ago, gross profit in our core business actually increased due to higher realized prices and lower product costs. As well, our Fuel Services business saw improved margins during the quarter.
Looking forward, Cameco expects that almost a third of our 2010 Uranium deliveries will take place in the fourth quarter. And before I talk further about our operations, I’d like to draw your attention to the 2010 update of our sustainable development report that can be found on the Cameco website.
Our sustainable development programs and reporting are a work in progress and we are committed to both full disclosure and continual improvement. It simply makes good business sense.
Secondly, I will ask our Chief Financial Officer Kim Goheen to provide a further update on our progress toward adopting the international financial reporting standards, more frequently referred to as IFRS.
Kim Goheen
Thank you Gerry, and good morning. The third quarter marked another quarter of progress in our IFRS transition project and contained new disclosures. We completed our work relating to the transitional impact of IFRS on earnings for the first two quarters of this year, and have included current estimates for the most significant differences between earnings under Canadian GAAP and IFRS.
These estimates show that for the first and second quarter, there’s very little difference between our net earnings under Canadian GAAP and net earnings under IFRS. For the first quarter, net earnings were identical and in the second quarter Canadian GAAP earnings were $1 million lower than they would have been under IFRS. As we have indicated previously, IFRS is not expected to impact our growth strategy, financial resources or operations.
We’ve also created a new section on our website that is dedicated to IFRS. Today, it contains a list of frequently asked questions such as the disclosure timeline. This FAQ will be updated as we move forward with adopting IFRS.
I am pleased to announce we will be holding a workshop in Toronto this December to assist our stakeholders in understanding the impact on Cameco of adopting IFRS. I encourage you to visit our website or contact our Investor Relations department for more information. Back to you Gerry.
Gerry Grandey
Okay, Kim. Thank you. On the operational side, Cameco’s focused on achieving excellence continues to pay off with ever more consistent production throughout the year. At our flagship MacArthur river operation in the Athabasca Basin, we are advancing development of new extraction chambers ahead of production.
This allows us to continue employing the cost effective rays for extraction method as we move into additional zones.
At Key Lake, the reliability of existing infrastructure is being maintained, and the capital program to renew the mill is on track as evidenced by the progress made in constructing the new acid and oxygen plants.
As recently reported, our employees at the two facilities I just mentioned ratified a new four-year agreement. We view this new agreement as a fair one for all involved; one that provides business certainty for an extended period.
At Inkai production continues to ramp up. We await confirmation from our partner, Kazatromprom and government approval to produce at plate capacity in 2011. This would provide 3.1 million pounds annually to Cameco’s account.
Read the rest of this transcript for free on seekingalpha.com
