Energy Resources First-Half Profit Surges on Prices
Angela Macdonald-Smith and Paul Gordon
Bloomberg
Energy Resources of Australia Ltd., producer of more than a 10th of the world's mined uranium, reported first-half profit jumped almost sevenfold on higher prices and said it has agreed to sell its first cargo to China.
Net income rose to A$38.9 million ($37.3 million) in the six months ended June 30, from A$5.7 million a year earlier, Darwin-based Energy Resources, which is controlled by Rio Tinto Group, said today in a statement to the Australian Stock Exchange. Sales rose 46 percent to A$167.4 million.
Prices for the radioactive metal reached a record $138 a pound in June last year before falling, buoyed by renewed interest in atomic energy to combat global warming and meet rising electricity demand. The company got an average price for its uranium oxide, produced at the Ranger site in the Northern Territory, of $35.69 in the half, more than double the year- earlier period.
"Overall sales pricing benefited in the first half from a higher proportion of deliveries for more recent sales contracts at higher prices, as well as deferral into the second half of 2008 of deliveries for lower-priced commitments," the company said. The average price realized in the second half will probably be `somewhat lower' than in the first half, it said.
The first-half profit included a pretax gain of A$14.5 million from settling forward exchange contracts.
China Agreement
Energy Resources said it reached its first agreement to supply uranium oxide to a utility in China, starting this year.
"China's going to be a very important part of our portfolio going forward, so we thought it's good to highlight it," Chief Executive Officer Chris Salisbury said in an interview with Bloomberg Television today. He declined to name the buyer or give any details of the agreement.
China is turning to alternative energy sources to cut its reliance on polluting coal, which generates almost 80 percent of the nation's electricity. The country estimates atomic power will account for more than 5 percent of total electricity production by 2020.
"Clearly, with China's energy demand and their demand for clean fuel, we see a great opportunity for Australian uranium there," Salisbury said. "We'd like to continue to grow the opportunities we see in China."
Net income rose to A$38.9 million ($37.3 million) in the six months ended June 30, from A$5.7 million a year earlier, Darwin-based Energy Resources, which is controlled by Rio Tinto Group, said today in a statement to the Australian Stock Exchange. Sales rose 46 percent to A$167.4 million.
Prices for the radioactive metal reached a record $138 a pound in June last year before falling, buoyed by renewed interest in atomic energy to combat global warming and meet rising electricity demand. The company got an average price for its uranium oxide, produced at the Ranger site in the Northern Territory, of $35.69 in the half, more than double the year- earlier period.
"Overall sales pricing benefited in the first half from a higher proportion of deliveries for more recent sales contracts at higher prices, as well as deferral into the second half of 2008 of deliveries for lower-priced commitments," the company said. The average price realized in the second half will probably be `somewhat lower' than in the first half, it said.
The first-half profit included a pretax gain of A$14.5 million from settling forward exchange contracts.
China Agreement
Energy Resources said it reached its first agreement to supply uranium oxide to a utility in China, starting this year.
"China's going to be a very important part of our portfolio going forward, so we thought it's good to highlight it," Chief Executive Officer Chris Salisbury said in an interview with Bloomberg Television today. He declined to name the buyer or give any details of the agreement.
China is turning to alternative energy sources to cut its reliance on polluting coal, which generates almost 80 percent of the nation's electricity. The country estimates atomic power will account for more than 5 percent of total electricity production by 2020.
"Clearly, with China's energy demand and their demand for clean fuel, we see a great opportunity for Australian uranium there," Salisbury said. "We'd like to continue to grow the opportunities we see in China."