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Top uranium producer Kazatomprom says half-year net profit up 33% amid rising uranium prices

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(Kitco News) - Kazakhstan's Kazatomprom (LSE: KAP), the world's largest uranium producer, announced today that the company produced 5,411 tonnes of uranium (as U3O8) in H1 2023 on an attributable basis, unchanged from H1 2022 (5,414 tonnes).

According to a press release, overall, uranium production in Kazakhstan (100% of KAP and its partners' production) was 10,225 tonnes in H1 2023, up 2% compared to H1 2022 (10,070 tonnes).

In H1 2023, KAP sales volumes were 7% higher compared to the same period in 2022, primarily due to timing of customer-scheduled deliveries.

The company’s average realized uranium price for the first half of 2023 of US$46.63/lb was 17% higher compared to the same period in 2022 (US$39.70/lb) due to higher uranium spot price.

During the first half of 2023 the Group’s consolidated revenue was KZT 618,744 million (~US$1.3 billion), an increase of 25% compared to the same period of 2022 (KZT 493,716 million in the first half of 2022).

The increase in the Group’s revenue was mainly due to an increase in the average realized uranium price; increase in sales volume; as well as an increase in revenue from uranium products (fuel pellets) and rare metal products.

Operating profit in the first half of 2023 was KZT 252,497 million (~US$543 million), an increase of 46% compared to the same period of 2022 (KZT 172,818 million in the first half of 2022), mainly due to higher revenues.

The company’s net profit in the first half of 2023 was KZT 222,333 million (~US$478 million), an increase of 33% compared to the same period of 2022 (KZT 167,374 million in the first half of 2022). The increase was mainly due to higher operating profit.

In 2023, the company expects to produce between 20,500 and 21,500 tonnes U on a 100% basis and between 10,600 and 11,200 tonnes U on an attributable basis. The company expects all-in sustaining cash cost (AISC) of $21.00–$22.50/lb in 2023.

The company said it demonstrated “strong” financial results for the first half of 2023, “which reflects a significant improvement in the situation on the uranium market over the past year.”

Importantly, KAP pointed out that given the “steady improvement” in the dynamics of uranium supply and demand, the company as before plans to increase production volumes in 2024 “in accordance with market fundamentals and expansion of the contract portfolio.”

Kazatomprom is the world's largest producer of uranium, with the company's attributable production representing approximately 22% of global primary uranium production in 2022.

The company benefits from the largest reserve base in the industry and operates - through its subsidiaries, JVs and Associates - 26 deposits, located in Kazakhstan, grouped into 14 mining assets. All of the company's mining operations are located in Kazakhstan and extract uranium using in-situ recovery technology.

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