The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Wednesday, February 05, 2003

USEC reports $14.7 million loss during last half of 2002

By Joe Walker

With its only production plant on strike, USEC Inc. has reported a loss of $14.7 million, or 18 cents per share, for the six-month period ending Dec. 31. That compares with earnings of $4.8 million, or 6 cents per share, during the same period a year earlier.

For the quarter ending Dec. 31, USEC lost $15.9 million, or 19 cents per share, compared with earnings of $9.5 million, or 12 cents per share, in the same quarter last year. USEC changed to a calendar fiscal year as of Jan. 1.

Six-month revenue in 2002 was about $708 million, down from $861 million the year before.

Among the reasons for the drop were lower sales volume of enriched and natural uranium, lower average prices for units of enriched uranium and accelerated spending on advanced gas centrifuge technology, the company said.

"Although we recorded a loss for the six-month period, we've taken a number of steps to lower our costs, and we've begun to invest more heavily for our future the American Centrifuge technology," said William "Nick" Timbers, USEC president and chief executive officer.

He said the steps include:

Lower, market-based prices for enriched uranium from Russia that will "lower our purchase costs significantly" starting this year.

Substantially reduced production costs at the Paducah plant (before the strike) and more measures later this year. USEC is expected to cut another 200 plant jobs by summer through 90 early retirements and 110 layoffs.

Signing contracts for future deliveries that take advantage of rebounding market prices.

Deploying gas centrifuge at a 2002 investment equivalent to $10 million in earnings.

Timbers said he expects the firm to earn about $15 million this year, based on controlling plant costs and realizing lower costs of Russian uranium. Because of lower-priced contracts signed in the past, average prices to customers are expected to drop about 1.5 percent in 2003 from 2002. Overall revenue is foreseen to be about $1.3 billion, including about $110 million in sales of natural uranium.