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
