Uranium One (TSE:UUU), one of the world's largest uranium producers, swung to a profit in the first quarter as the company reported record revenues due to lower cash costs, higher uranium prices and sales volumes.
For the first three months of 2011, the Vancouver-based company, with mines in Kazakhstan, the US and Australia, posted net income was $14.0 million, or 2 cents per share, compared to a net loss of $1.4 million, or nil per share, in the year-ago period.
On an adjusted basis, net income rose to 2 cents per share from a net loss of 2 cents per share in the first quarter of 2010.
Revenue during the period rose 187% to an all-time quarterly high of $101.9 million, up from $35.5 million a year earlier, as the company's average realized sales price for uranium increased 33% to $61 per pound and attributable sales volumes more than doubled to to 1.7 million pounds.
Total attributable production in the quarter was a record 2.4 million pounds, 33% higher than the year before, as the company benefited from newly acquired interests in mines.
Total cash costs also improved to $14 per pound sold, versus $18 in the first quarter of 2010, mainly due to lower operating expenses at the company' South Inkai and Karatau mines.
"This quarter saw continued, low cost growth from our operations and a smooth integration of our recently acquired Akbastau and Zarechnoye mines," said CEO Chris Sattler.
The company said that despite the recent disastrous events in Japan impacting uranium demand, spot and term uranium prices have begun to recover, and current indications are that global uranium demand is expected to be reduced by just 5% over the next decade.
As a result, the company continues to be positive in its outlook, and said it stands by its attributable sales estimate of 9.5 million pounds in 2011, and 12.0 million pounds in 2012.
At quarter-end, the company had inventory of 3.6 million pounds, including work in progress, as well as finished product ready to be shipped.