Shares in the world's largest uranium ore producer, Kazakhstan's Kazatomprom (KAP.UK), are up nearly 6% today. Second-quarter results beat analysts' forecasts, although they came in slightly lower on a y/y basis. At the same time, expectations for next quarters' results are rising as uranium prices are up for the 10th week in a row, the raw material's best streak since the Fukushima disaster, in 2011. The price per pound of U308 is already at $65 and has also hit new 12-year highs. Kazatomprom has accounted for 30 to 40% market share of global U308 production in recent years, and the company is also involved in rare earth mining (including tantalum and beryllium). Kazatomprom uranuum mining is famous because of In-Situ Recovery mining (ISR) benefits which include lower cost of extraction, lower mining costs and footprint. The biggest risk of company is geopolitics and logistics routes.
- Higher uranium prices are supporting the company's margins, and global interest in nuclear power (including in Japan) means that markets see a 'uranium rush' on the horizon because the raw material is the basis for nuclear fuel. The company recently raised its annual earnings forecast from KZT1.08 billion estimated earlier to between KZT1.27 billion and KZT1.31 billion. Since then, however, uranium prices have risen another 10% by what the market is counting on to exceed the revised almost 30% upward forecast.
- The company reported sales of KZT 237.7 million in Q2, compared to KZT 348.4 million in Q2 2023. Net profit was KZT 76.8 million compared to KZT 83.8 million in Q2 last year. Earnings per share amounted to KZT 296 against KZT 323 in Q2 2023. At the same time, sales in H1 2022 were higher year-on-year at KZT 618.7 million against KZT 493.7 million in H1 2022, with significantly higher net income of KZT 180.2 million against KZT 121.1 million in H1 2022. Total earnings per share amounted to KZT 695 against KZT 467 in H1 2022. The USD/KZD f/x rate at the time of writing this news (26.09.2023) is around 479.
Looking at the chart of Kazatomprom (KAP.UK) on the D1 interval, we see that there is euphoria in the market and the RSI momentum indicator is approaching 90 points. The price has broken out above the 23.6 Fibonacci retracement of the March 2020 upward wave. Source: xStation
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appThe content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
