BETHESDA, Md. – Centrus Energy Corp. (NYSE American: LEU) announced today that it has secured new nuclear fuel sales contracts and commitments with utility customers over the past six months with an estimated value of approximately $85 million to $110 million, depending on quantities elected by customers, with deliveries from 2018 through 2030.
“The past several months have been productive for our sales team in winning new business and broadening our customer base,” said Centrus President and CEO Daniel B. Poneman. “We are encouraged not only by these new sales, but also by the fact that the published price indicators for the spot enrichment market have risen in each of the last two months, which are the first such increases since 2010.”
The sales results follow Centrus’ announcement as part of its 10-Q filing for the third quarter of 2018 that its unit cost of sales for enrichment has declined by 15 percent in the first three quarters of the year compared to the same period in 2017. The company expects a larger decline in 2019 cost of sales. Additional reductions are expected in subsequent years. The lower pricing of new supply contracts and pricing adjustments on existing contracts will benefit the company’s bottom line and help Centrus continue to win new sales.
Poneman noted the significance of securing a new customer in the European Union, where trade restrictions on imports of non-EU nuclear fuel have historically made it difficult for U.S. nuclear fuel companies to win sales. Centrus’ long-term supply agreements with Orano Cycle, based in France, will expand Centrus’ access to this important global market.
The estimated value is $85 million for the minimum purchase quantities or $110 million if customers elect to purchase additional flexible quantities. The estimates include signed contracts along with firm commitments under accepted proposals received during the last six months.
Centrus is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal.
With world-class technical capabilities, Centrus offers turnkey engineering and advanced manufacturing solutions to its customers. The Company is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future. Find out more at www.centrusenergy.com.
This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) – that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include risks: the continued impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the impact and potential extended duration of the current supply/demand imbalance in the market for low-enriched uranium (“LEU”); our dependence on others for deliveries of LEU including deliveries from the Russian government entity Joint Stock Company “TENEX” (“TENEX”) under a commercial supply agreement with TENEX and deliveries under a long-term supply agreement with Orano Cycle; risks related to our ability to sell the LEU we procure pursuant to our purchase obligations under our supply agreements; risks relating to our sales order book, including uncertainty concerning customer actions under current contracts and in future contracting due to market conditions and lack of current production capability; risks related to financial difficulties experienced by customers, including possible bankruptcies, insolvencies or any other inability to pay for our products or services; pricing trends and demand in the uranium and enrichment markets and their impact on our profitability; risks related to existing or new trade barriers and contract terms that limit our ability to deliver LEU to customers; risks related to actions that may be taken by the U.S. government, the Russian government or other governments that could affect our ability to perform or the ability of our sources of supply to perform under their contract obligations to us, including the imposition of sanctions, restrictions or other requirements; the impact of government regulation including by the U.S. Department of Energy and the U.S. Nuclear Regulatory Commission; the competitive environment for our products and services; changes in the nuclear energy industry; revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including under Part 1. Item1A – “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017.
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