Usec reports huge loss for 2012

16 March 2012

Enrichment firm USEC has reported a net loss of $540.7 million for the year ended 31 December 2011, compared with an income of $7.5 million for 2010. Sales were also down by $232 million (14%) to $1.39 billion.

The loss primarily reflects the impact of write-offs associated with the American Centrifuge project, tax-related valuation allowances and lower profit margin, USEC said.

Expense for advanced technology, primarily the American Centrifuge project, totaled $273.2 million, including $127.1 million related to earlier centrifuge machines that were determined to no longer be compatible with the commercial plant design.

Gross profit also declined by $74.2 million (47%) in 2011 compared to 2010, reflecting lower sales volume and higher costs for separative work units and uranium sold and the effect of pension plan and postretirement benefit plan curtailment charges related to the conclusion of contract services work at the former Portsmouth Gaseous Diffusion Plant (GDP).

2012 outlook

John K. Welch, USEC president and chief executive officer said that 2012 ‘will present additional challenges’ as the company makes important decision regarding the future operation of the Paducah plant, which is expected by May 2012.

“Nonetheless, we expect to sell more than 10 million SWU in 2012. These sales will come from our substantial inventory, from Paducah commercial production through at least midyear, and from our supply contract with Russia,” he added.

While USEC is still seeking the $2 billion loan guarantee for they American Centrifuge Plant, it currently has an agreement with the DOE that enables it to spend up to $44 million under a RD&D programme. This is expected to fund activities through end March 2012.

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