Kazakhstan’s National Atomic Company Kazatomprom has announced its consolidated financial results for the first half-year ended 30 June 2020.

“The theme of uncertainty in the uranium market persisted through the first half of 2020,” said Kazatomprom CEO Galymzhan Pirmatov. “However, the general sense is that there has been a shift in sentiment – from participants wondering ‘when’ the market will transition to support current and future primary production, to now talking of ‘how soon’ that transition could take place,” he added.

“Uranium spot price rose in response to the initial announcements of COVID-related supply impacts at the beginning of the second quarter, with intermediaries buying in anticipation of a potential supply deficit, and some producers entering the spot market to replace lost production."

"Until just recently, there has been very little contracting activity by end-user utilities, who have been far more focused on managing their nuclear plants through the pandemic. The absence of those end-users and any serious term contracting, tells us that we have not yet reached a turning point, though the potential pressure on supply for the second half of the year is starting to gain attention.”

Pirmatov added: “We have spent a great deal of time developing business continuity plans and with those plans in mind, along with the close monitoring of local restrictions, recommendations, and medical system capacities, we began gradually returning staff to sites at the beginning of August." As of 27 August, Kazatomprom resumed both exploration drilling and mine wellfield development work.

He explained: “As we previously advised, when we decreased staff on our sites and all drilling work stopped for four months, it meant that there was going to be a delay in new planned mining blocks coming online, so while there was little impact on the first-half production results, we expect to see a noticeable year-over-year impact on our second-half production volumes, and for the year.”

In the second half of 2020, “we will remain steadfast with our strategic focus by maintaining our market discipline in our core business of uranium mining, with continued expansion into new markets with new customers”.

The Group’s consolidated revenue was KZT 153.1 billion as at 30 June 2020, a decrease of 13% compared to 30 June 2019, due to lower sales volumes related to the timing of deliveries in the year, partially offset by an increase in the average selling price.

Kazatomprom's operating profit as at 30 June 2020 was KZT 47.5 billion ($364m), an increase of 75% compared with 30 June 2019. It was mainly due to an increase in the share of uranium sold that was produced by the company’s consolidated subsidiaries and joint operations as well as increase in average realised price. Net profit for the first half of 2020 was KZT 66 billion, a decrease of 37% compared with 30 June 2019.