Centrus Energy (LEU) 5 Aug 222022 Q2 Earnings call transcript

Greetings, and welcome to the Centrus Energy's Second Quarter 2022 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Leistikow, Vice President, Corporate Communications for Centrus. Thank you, Dan.

begin. may You

President thank will and of for us. Chief Dan joining ended Kevin Officer; Good Controller Harrill, the you results call and Poneman, have we cover XX. quarter Chief for Today's Executive June and morning be Accounting Today, all for Strawbridge, and and the Officer; XXXX on he but today's Philip scheduling questions follow-up next that Dan had taking available week. calls Chief will prepared our Officer, prevented their conflict Kevin call, will a Financial remarks. him being following be from second

Before like our our follows turning as webcast. of the well call welcome callers call conference earnings over to news Dan Poneman, our to This to release I'd as issued listening those all yesterday.

the XX-Q on of for We second quarter later expect Form to XXXX our today. file report

our Centrus I news A that risk our on would involves XX-K, discuss Centrus. be available be that like information performance morning SEC are filings, to remind the later assumptions call also considered and forward-looking website. future X-Ks and releases today certain of this about call will website. including on of this XX-Qs the information All our uncertainty, available replay this may including may and of we of the everyone on

Our forward-looking materially actual results from may our statements. differ those in

on statements on report Additional forward-looking annual in contained is the Form could from actual cause including XX-Q. factors filings our those information our and that concerning in XX-K results to our quarterly SEC, differ with Form materially reports

the Any retransmission Centrus over otherwise noted. written prohibited. of is any property the Finally, Dan expressed is the unless is you call August and Poneman. today, your the I'll now the information X form call for to in trans consent accurate [indiscernible] call or Energy. And rebroadcast XXXX, participation. transcription, Centrus of as today provided strictly of turn redistribution, Thank without of forward-looking This only

the everyone today. and Thank call to you, thank you on Dan,

and $XX.X profit a income. strong always quarter-to-quarter of on speak million our in feature and The is revenues to productive the gross numbers quarter $XX.X widely for report that revenue, for remind these We and from another vary net nuclear themselves. million of margins based that calls normal face in are performance But about happy in million timing deliveries, on and Centrus. the listeners the and business do We by is Ukraine. that numbers the fair business brought matters Russia's are that annual global of another the most. to the like that it's continued market I our challenges pandemic that in changes fuel resilience these invasion the of of even example of think say in $XX.X

secured a to new those navigate our and sales proud team long are term. separate and the but enormously Along about need $XXX million. to to we our work of investors up and they environment sometimes first company I about sales Uranium for and to quarters the are We strong difficult customers fuel our worth SWU, help our contracts the doing expect. totaling $XXX numbers. our continuing also am lines, of we for work of results putting year, two team grow made the deliver deliveries units has million, been commitments the In

of our has now stands $X the the year of result, a course and over the value As total order around book increased billion.

or for worldwide supplier only is low-enriched currently when much tell to rise around uranium reactor has numbers invasion enrichment focus. of is of now market contributed be low-enriched the fuel been a more under Russia assay, This for gas, and prices And enrichment for that and uranium policymakers uranium reactors and existing dramatic comes the to the support Ukraine Centrus story. reactors alone numbers of don't whole in brought both a for investments into new It HALEU, has said, high required as discussion an fuel participants can nuclear it as to the is As with themselves, the to LEU this the in industry development. dominant while natural world's energy capacity of new will the sharp issues of of urgency security domestic XX% indispensable next-generation The sense HALEU. for I lead capacity. much but most advanced from uniquely well positioned source speak uranium is effort.

U.S. We technology of requirements. as as have well that is deployment-ready meeting commercial national capable the only security

site production Our produce site country only that also LEU and is already is Commission the for licensed Regulatory licensed the is Nuclear to in by the HALEU.

bid promote support strong to solicitation, and program availability production submit missions. a part one a of a utilities of We with production the innovative proposal that. we and/or world request our HALEU plant commercial operation case begin funding The beyond Energy of next designing have tomorrow. next that been whatever in well demonstrating broader of we companies month. have building is this advanced expected and HALEU competitive of reactors Subject for that of the can national the years commercial around most production pleased take are the is security the is issued to make are enrichment that demonstrate government scale HALEU and for and HALEU and including the Ohio This hard many our We're requires, year. to market off relationships availability expected tie to later stage of HALEU long-standing both level the that LEU has as of and as we the $XX XXXX. Act $XX facility been and when the which working Inflation is and for million demonstration recently developing a to real, Department Nuclear restoring fund up to build capabilities HALEU has commitments we jump purchases by Department potentially also This $XXX production. announced clear infrastructure. for for The million start as domestic Energy include Senator a Energy out to Reduction the at house, Institute year increased Congress is annual the to energy but enrichment text draft is There of fiscal the XXXX, cannot media proposal a of uranium the is proposed HALEU. is leadership domestic LEU established and We and water have administration and million Schumer growing. the proposal and way predict where The Senator behind production in the has administration land, while been recently Masha make $XXX million that will reports HALEU of was fiscal process momentum to have it legislative industry $XXX year it that that American of in year. million the in that passed others funding bill in per the embraced the appropriations the provided of

turn over to now Kevin? me let numbers, the of Kevin more things Harrill. For

Thank you, morning, Good Dan. everyone.

and the mentioned and we year. revenue discussed margins our Dan As on regularly these as in throughout there variability calls, considerable is

was relatively quarter first year second we this of the but subdued, quarter, LEU several The had in deliveries.

have have revenue in with any an book two customers LEU Our Most quarter The take which major delivery, focus is utilities. same happens here. comes compares contracts, their to from of on course how we Under that what but factors the in quarter. customer X business in of Again, obligation. sales multiyear that and the the typically quarter, quarterly not annual not chooses a at and to the happens contracts year revenue over there are play our purchase obligation years. those what prior we

uranium the For XXXX and of quarter sales example, will $XXX in through deliveries year, than in contracts the include delivering. secured recognized and whatever from two they in These first and SWU new of Centrus more And quarters sales revenues XXXX. are those year million commitments. be

Secondly, our have late declined slow contracts book $XX to $XXX Ukraine and per the invasion. had to were $XX We below our price then, per sales were in order and the indicators SWU pre-Fukushima market published that And price signed. in around significantly to signed to prior steady then XXXX. a $XX Since long-term contracts that the enrichment area. began indicators spot price but peaked market. rise the for down in they prices vary above based by when $XXX per in SWU upon SWU around up risen Published

therefore contracts were vary deliveries quarterly depending both on those volume higher-priced whether will lower-priced and Our contracts. on or revenue delivery

$XX.X profit quarter against in profit resulting in months quarter increased the of quarter gross compared overall our of for compared deliveries $X.X June in segment revenue the million. revenues $XX.X we In Centrus a our the of our the million net segment of for to were cost for for same earned the million. more gross sold of our of million we XX, segment, than revenue profit SWU same second sales than SWU of a cost $XX.X total in of of reduction million $XX.X segments, of segment. But Solutions the revenue the cost volume declined, in increase in price year. lower prior ended a two also profit million. the gross was in segment, the XXXX. for million. offset of gross $XX.X the the Combining profit Segment in million $XX.X that $X.X sales for same for time, segment per For $XX.X the and of Technical in the unit by sales segment. was quarter the At average to million LEU million the XXXX. an a the declines, In $X.X resulted three This quarter resulted but the This in generated

in of we XXXX. $XXX.X we recall, million annual our $XXX million This helped XXXX. status liabilities by that funding to of As plan impact million course liability the our $XX.X strong last pension more of our pension was long-term you by in the the postretirement for XXXX U.S. health combined secured pension growth primarily at and a driven filing, of government the our reported over million just the $XX.X legacy end pension settlement with XX-K That assets, benefits. than in reduce improvement the may from year year-end of an with our cut long-term

a year, pension liability is Ultimately, While which rising the pension beginning million interest offset due down the remaining of noncurrent though show rates. substantially status, net have to liability. equity in decline $XX in at actuarial in pension our are the assets partially assumptions the been continued markets pension this established improvement by a of decline year

balance back the billion cash a million going $XX.X and June turn valued We a financial of the over long-term let end position restricted at with $XXX.X Dan. are forward XX. in $X that, to strong things of order includes which of of me assurance million, book as cash as a quarter, for financial of With

you, Thank Kevin.

plants the and ago. the world prices recent spot our doubled. year, higher much the to make they the fuel Before just in leaders and for expectations work industry SWU There prices to nuclear new just prices security talk rapidly overall in five recently and has to of pivotal have to earlier That of questions, their shutdown European further. months. Canyon announced we and the still opportunities upended step realization TerraPower stronger for to its about the prices energy state plants more power we the Agency's fleet more have well advanced prices deliveries require At by Since come. delaying late behind of that Centrus wind in all steam remaining spiking. could have we of greater Even gaining its to nuclear the benchmark at take the reverse the embracing emissions number the a state global XXX challenging, Bill end to nuclear government More the to new effect often committed increasing as is that leadership contracting requires prevent a in mid-century. will broader need is with an have year the and changes building new change, have climate program, as the to price between witnessed to more Governor end solar which outlook is the years. and doubt not ago. reduce the reconsidering down doubling plant, utilities means is and has and this more are up energy nuclear will plants catastrophic and which nuclear consider landscape power than are go we XXXX carbon-free than existing invasion secure prices megawatt from that your tool could scale an the the global Indeed, Wholesale XXXX. Europe XXX Natural nuclear German in providing months electricity from natural countries the is generates added than vulnerable as XX promote as in utility scenario the your it particularly Last the to doubled Diablo to average been have XXXX for world, revive in and to provide July. than gigawatts retire taxonomy, the in more for roughly Union same pathway of either by now momentum dormant time, gas long-term with of power years. wider replace decades a month, before coal-fired challenge increased as the of back the sales few Ukraine used vital that reactors and of for against long in or that scale decision electricity on retiring doubled assured by a gas natural a we'll Union those as the in United as has a in around Achieving doable. are In agreed plants nuclear prices accelerate to for me is prices focus European The failure zero decision coal is the industry States carbon now has government prompted global a option. for to let to than reactor long-term XX% the supplies the a That's ones their that with its first urgency energy by last Governments reactors decisions The to than it the pricing also today activity fuel Wyoming, Operator? get the kind in no a on but chains. nuclear market have per and surged the California, HALEU-fueled hour has and caused International around throughout Netherlands gas €XXX supply XX% state designed of And a three growth climate is maintaining source year. of one plans sodium that, of gets shut reactors. of to given green from net include The installed backed public-private be change. partnerships, fuel the support gigawatts to deployment Nusa down strong installed that Europe the questions. turn nuclear And Energy by Gates. fight of fast times

line Please question. Thank you. Capital. [Operator Rob Instructions] Our first Street question comes Lake Brown with your from of proceed the with

Good morning.

Rob. Good morning,

your sort forward? a I just activity the activity -- of driving that's that pipeline the much of sales up sort that? want to And still SWU new to yet is pulled Or what's out the the convert? pricing rest activity -- how follow the it lot How on there? comment is how is about of of

when just XXXX a buy to suite the as it cheaper in be August going prices in history of down, XXXX, think, I put to experienced of if you shoes yourself broad Why about we kind Well, fuel look buyer. of Rob, have will today the tomorrow. from

this. the you kinked that now just there's now up. cheaper, Number obviously. energy supply sooner buying they're and an because uncertainty if the of so aspect then Number it's two having to secondly, security moving one, and right? see a of scenarios, There's there of really things. advantage all in is straight frankly, be the And going And related, one pure, curve of

to with are operate in sight clear So chain. supplies, of line supply trying to your reaction very long-term a important lock people it's to very a

that question. are that if play. So fully are don't in your I I those answers know factors the think

And know get need your in to sort things about legislative following the helpful. Very your to to just How start how place it the of supply. U.S. comments to decisions once view up some a made? of on great. pieces online to of takes long when on the efforts these That's fall get supply is increase start and happening. then I there's lot

Well, prognosticator Congress to quite one U.S. predict actions hand. on timing fine of the the it take would the a of

about the morning to weekend. Rob, news the read have promising I possibly speak over I this hand, reports mansionsumer and other of Congress. promptly folks to a seen, anticipatory the have legislation, back Pelosi support on person of this seen would the But very On think Indications behalf passing bring support, addressed. ones We've on I Speaker side. House [ph] lot this last the

these and under it's million, the all an significant investments in absolutely reactor TerraPower got supply. advanced and fuel the sign off that program kind right, they got energy a administration, is actually imperative reactors view to fully enacted the million, remarks, in the request in making than looking would industry for the especially even the that's that's large The administration process, beyond the house at So it signal, the doubled fiscal urging that more And as but Institute our requested higher. we've been also it's then it's is hope right? coming for. the normal significant and its have the that It's million. house now. Nuclear very because $XXX a mentioned so encouraged last to year would the including short market there's been of both changer to get in So a that, compared really same, with an mark $XXX and Energy market appropriations just signal And are indeed, building exactly very $XXX huge my for which HALEU, always while in a We've President soon election put investment, time one. the time, we're ex And I've frankly, very year. game -- development that see from very it's $XX mind really both you to in advanced bill been of but million which very, in have really complex, was

people gratifying of think I recognized so logical, to that also it's sort that. it's quite have see And but

And continuing effort, do resolution me to commentator and a appropriation and so is, Rob, cycle another the TV elections whether to I see you whether what it past not some expect is help see continuing you're they November would take in the going Congress get the we'll out.

you. Thank

Joseph question proceed Capital your next the Partners question. with Roth from with Please line comes Our of. Reagor

thanks and for team Dan the Hey questions. taking

Hey Joe.

give it. the new across Is years? down on on us the can't it year-by-year far any So roughly million weighted? you six that realize as as additional it weighted? contracts; breaks how even? a of $XXX I Is back-half color Is it But front-half

I Joe, we that really think don't disclosure public into kind go Yes. space. thing of in

So we just then of quarters think they and global in they numbers roll kind out do roll out. the will successive the I as

Okay.

guys HALEU on thing, give on kind contract competition, the you as of license you with the the a space us far background right now. what only other can competing the like Second are for, that as HALEU a ones looks little you're

is So and has in say like really town. more the party to open it is is are an this you it government the only a really competition? matter guys Or of

speak competition. out would to work the Well, part proud department my are goes and as if -- things. own But make very, hard second extraordinarily Day. been real I that other preparing They and hard an you to to It's itself. question, even you've had These there. companies. going exposure seriously real. the enough on I taking of indeed. American any on mean, it's Joe, into Industry an detailed behalf, RFI see intensive the work them And RFIs, we're a it's very think, had of it has They to to behalf your I'm speak I'm sure not the

and We massive table, the and it be thoroughly capabilities. what so and RFI on focused we about taking taking bring granted, feel to good compared we're And We responsive a undertaking, seriously. feel good is our very thoughtfully cycle the about are we to very laser but nothing beam. for we're to

be for to management like to time. further to questions no appear comments. back this I'd over There Instructions] at turn you.[Operator closing floor the Thank

Thank conclude of quarter call This will our the investor XXXX. you, operator. for second

who to to with forward called speaking quarter. extend in. listeners want And you thank look online next As a to we our always, and again you I investors

today's This concludes teleconference.

You may day. and this time. you have disconnect at wonderful your lines a participation, your Thank for