USEC gives financial update but abandons acceleration plans

21 December 2005

American uranium enrichment company USEC has updated its 2005 earnings guidance and provided an outlook for its American Centrifuge programme in the coming year.

The company expects full year revenue to total $1.55 billion with net income in 2005 in a range of $27-30 million after the American Centrifuge expense. This is an $8-9 million improvement in net income over guidance provided in early November and is primarily a result of lower than budgeted spending on the American Centrifuge in the fourth quarter, where 2005 expenses are expected to total approximately $90 million.

USEC plans to obtain satisfactory performance and reliability data by October 2006. However, given the previous delay for beginning Lead Cascade operations, USEC is no longer managing the programme to meet the accelerated schedule that moved up the remaining milestones by about one year.

"We believe that 2006 will be a critical year in the demonstration of the American Centrifuge. Successful operation of the Lead Cascade will allow us to evaluate performance data, refine our cost estimates and confirm a deployment schedule in order to assure that shareholders receive appropriate value for their investment," said president and chief executive John K Welch, who added: "Given the rising cost of electricity – the largest cost component of our production – USEC is intently focused on deploying the energy-saving American Centrifuge technology as soon as possible," Welch said. "But my experience with large construction projects tells me that the accelerated schedule set previously is no longer feasible and it could be a far more expensive path to follow."


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