Quarterly Report - 2018 - Q3

On November 2, 2018, Cameco reported its consolidated financial and operating results for the third quarter ended September 30, 2018 in accordance with International Financial Reporting Standards (IFRS).

“Our results and the updates to our outlook reflect the impact of our decision to extend the shutdown at McArthur River/Key Lake, and the tax case ruling that was unequivocally in our favour,” said Tim Gitzel, Cameco’s president and CEO. “As a result of the updates to our outlook, we expect a strong finish in the fourth quarter.

“The uranium market is showing a marked improvement compared to a year ago, in fact relative to the first half of the year, but there is still a long way to go. There are a lot of moving parts in the market right now, largely driven by market access and trade policy issues, and there continues to be a lack of acceptable long-term contracting opportunities.

“We are effectively navigating the current market developments, and are making the decisions necessary to keep the company strong and viable for the long-term.”

• Net earnings of $28 million; adjusted net earnings of $15 million: Results were impacted by care and maintenance costs of $65 million, which includes severance costs of $27 million related to the permanent layoffs at McArthur River/Key Lake, severance costs of $13 million related to the workforce reductions at corporate office, and the reversal of the $61 million provision on our balance sheet related to our dispute with Canada Revenue Agency (CRA). Adjusted net earnings are a non-IFRS measure, see page 3 in our news release.
• CRA tax dispute: On September 26, 2018, the Tax Court of Canada ruled unequivocally in our favour in our case for the 2003, 2005 and 2006 tax years. On October 26, 2018, CRA filed an appeal with the Federal Court of Appeal seeking to overturn the decision. We believe there is nothing in the decision that would warrant a materially different outcome on appeal, or for subsequent tax years. For more information, see Transfer Pricing Dispute in our third quarter MD&A.
• Updated outlook for 2018 and 2019: We have updated the outlook provided for 2018 and 2019 to reflect changes in the exchange rates, the decision in our tax case with CRA, and the additional purchase and sales activities undertaken to date. For more information on the changes, see Outlook for 2018 in our third quarter MD&A.
• Annual dividend declared: For 2018, an annual dividend of $0.08 per common share has been declared, payable on December 14, 2018, to shareholders of record on November 30, 2018. In 2017, our board of directors reduced the planned dividend to $0.08 per common share to be paid annually. The decision to declare a dividend by our board is based on our cash flow, financial position, strategy and other relevant factors including appropriate alignment with the cyclical nature of our earnings.