- Continued robust business and financial performance
- URENCO’s strong position in growing market
- Long-term order book drives expansion
- URENCO USA/LES first commercial operations scheduled for Spring 2010
- Treaty of Almelo anniversary: enabling URENCO to develop 40 years of world-leading enrichment technology for civil purposes
|Income from operating activities||500.4||459.0||9%|
|Net Income before exceptional items||342.8||274.5||25%|
|Cash generated from operations (before interest & tax)||656.4||616.0||7%|
¹ 2008 IFRS figures have been restated due to the capitalisation of interest under IAS 23
Continued robust business and financial performance
Robust business performance over the year and the achievement of solid financial results demonstrate the effectiveness of the Group’s growth through investment strategy. Improved operational efficiency is demonstrated by continued growth in EBITDA and net income with revenue remaining in line with the previous year. Volumes of SWU sales were higher during the year (+4%). This was not reflected in revenue due to the impact of foreign exchange movements on the hedged sales price.
EBITDA rose by 2% to €669.7 million (2008: €654.3 million) after significant start-up costs for the URENCO USA/LES facility (2009: €75.9 million; 2008: €57.9 million). The growth in EBITDA was achieved largely due to other operational efficiencies, economies of scale, the weaker sterling-to-euro exchange rate and a release of some decommissioning provision following a detailed review.
Net income grew by 32% (25% before exceptional items) during the period (2009: €342.8 million; 2008 €260.1 million). The key drivers of the increase were higher EBITDA, lower depreciation charges and lower Net Finance costs.
The continuing high level of capital expenditure (2009: €843.0 million; 2008: €820.8 million) in the year illustrates the ongoing capacity expansion across Europe and at URENCO’s new facility in the US.
Internal cash generation from operations remained strong, increasing to €658.3 million (2008: €616.0 million), a 7% increase.
Growing market position and long-term order book
URENCO continued to be a principal supplier of enriched uranium to the worldwide nuclear power industry with a global market share of 25%, providing the Group with strong earnings and cashflow visibility into the future. Demand for services continues to increase and the already strong order book grew by 8% in 2009 to €19.5 billion and extends beyond 2025. This drives the capacity expansion plans across the Group.
Capital investments and capacity expansion programmes: operations at the US facility to commence
Capacity installation across the URENCO Group led to an increased production capacity of 11%, from 11,000 tSW/a at the end of 2008 to 12,200 tSW/a by the end of 2009. Capital investment across the Group for the year totalled €843.0 million, a rise of 3% compared with 2008. Based on the order book, the near-term goal for URENCO remains to increase installed capacity to achieve production of 18,000 tSW/a by 2015.
In the US, considerable progress was made on the construction and enrichment capacity installation at URENCO’s fourth enrichment plant, URENCO USA/LES, which is currently awaiting NRC approval to begin commercial operations. Commercial operations are scheduled to commence in Spring 2010.
Investment funding and credit rating
A significant funding source for the expansion programme remains the Group’s internally generated cashflow. However, external financing continues to be required in the coming years, and URENCO continues to review funding opportunities across international funding markets. The Group was successful in attracting more than €660 million in new funds during 2009. In addition, a further €500 million was raised on the Eurobond market in February 2010, securing cover for our borrowing needs well into 2011.
URENCO aims to maintain its single ‘A’ credit rating based on a solid financial position and a strong long-term order book.
Treaty of Almelo anniversary: 40 years of world-leading enrichment technology for civil purposes
This year the Treaty of Almelo celebrated its 40th anniversary. The Treaty provides URENCO with the legal basis to develop its world-leading centrifuge technology and to expand its nuclear fuel services to customers all over the world. URENCO continues to invest significant funds (around 5% of total costs) each year to remain at the forefront of technological development.
Continued focus on safe, reliable, high quality operations and reducing our impact on the environment
URENCO is committed to operate to the highest standards of safety, environmental and security requirements. In terms of environmental impact, 2009 saw a significant step with the approval of the Group’s first Tails Management Facility, located in the UK. This will convert the by-product of the enrichment process to its most stable form, U3O8, which can then be stored long-term, with no detrimental impact on the environment.
The Group continues to deliver strong business and financial results. It continues to expand its position in a growing market and its order book against a backdrop of increased demand. URENCO expects the positive trend of its growth through investment strategy to continue during 2010.
Helmut Engelbrecht, Chief Executive of the URENCO Group commenting on the 2009 results said:
“Our strategy of growth through investment is gaining significant momentum. Our order book has increased by a further €1.5 billion. Our focus remains on meeting the needs of our customers as their businesses develop.
In terms of business performance, 2009 was another successful year for us with improvements in both EBITDA and net income.
URENCO is uniquely placed having a stable long term business in a growing market with strong global utility customers: we are the “utility of utilities”.
Download Full Year Results here.