Canadian uranium producer Cameco (CCO.TO)(CCJ) boosted its annual dividend for 2024 on Thursday, while announcing a plan to double last year’s payout by 2026.
Cameco reported third-quarter financial results on Thursday, with net earnings falling to $7 million from $148.1 million in the same period last year. The company swung to a per-share adjusted loss, as the quarter was impacted purchase accounting for its Westinghouse acquisition, and what the company calls “normal variations in sales volumes.”
Saskatoon-based Cameco’s revenue climbed 25 per cent year-over-year to $721 million for the three months ended Sept. 30. Adjusted earnings before interest, taxes, depreciation, and amortization increased 32 per cent on an annualized basis to $308 million.
“Fundamental drivers, things like decarbonization, sustainability, energy security, and growing energy demand all remain solid and unchanged. However, on the other side of that equation, future supply continues to be uncertain,” chief executive officer Tim Gitzel said on a post-earnings conference call. “While the long-term uranium price has crept up to its highest level in over a decade, we’re still not seeing significant investments in the projects needed to satisfy future demand.”
Cameco announced its 2024 annual dividend of $0.16 per common share, payable on Dec. 13 to shareholders of record on Nov. 24., on Thursday. That’s up from $0.12 per share in 2023.
“We have recommended to our board of directors a dividend growth plan for consideration,” the company stated in a news release. “We expect an annual increase of at least $0.04 per common share over the fiscal periods 2024 through 2026, to achieve a doubling of the 2023 dividend from $0.12 per common share to $0.24 per common share.”
Toronto-listed shares climbed as much as 5.6 per cent on Thursday, before closing 3.82 per cent higher at $74.23 per share. The stock has gained about 25 per cent year-to-date.
Cameco says uranium production rose to 4.3 million pounds in the third quarter, up from three million in the same period last year. Sales topped 7.4 million pounds, four per cent higher than the same period last year, but below analyst estimates.
Chief financial officer Grant Isaac says some deliveries were delayed due to transportation challenges at the company’s joint venture Inkai mine in Kazakhstan. Cameco’s partner in the project is Kazatomprom, the world’s largest uranium producer.
“We made a decision when the Russians invaded Ukraine that we would not utilize the normal transportation channels to get materials out of Central Asia. Normal transportation channels involved using Russian rails and Russian ports,” Isaac told analysts on Thursday’s conference call.