Centrus Energy Corp. has recently released its 10-K report, detailing its operations as a supplier of nuclear fuel components and services for the nuclear power industry in the United States, Belgium, Japan, and internationally. The company operates through two segments, Low-Enriched Uranium (LEU) and Technical Solutions. The LEU segment sells various components of nuclear fuel to commercial customers, while the Technical Solutions segment provides advanced uranium enrichment and technical services to government and private sector customers.
In the Management’s Discussion and Analysis of Financial Condition and Results of Operations, Centrus Energy Corp. highlighted the significant fluctuations in spot prices for separative work units (SWU) over the years. Spot prices declined by over 75% following the 2011 Fukushima accident in Japan, bottoming out at $34 per SWU in August 2018, before reaching $195 per SWU by December 31, 2024, surpassing the previous historic high. This surge in spot prices has been attributed to the uncertainty created by Russia’s invasion of Ukraine, coupled with growing interest in nuclear power as a secure and carbon-free energy source.
The company also discussed its involvement in the HALEU Demonstration Contract with the Department of Energy (DOE), highlighting the construction of a cascade of centrifuges in Piketon, Ohio, to demonstrate high-assay low-enriched uranium (HALEU) production. The contract has been subject to modifications, with ongoing activities and deliveries of HALEU to the DOE.
Furthermore, Centrus Energy Corp. detailed its participation in multiple contracts and solicitations by the DOE for HALEU deconversion, HALEU and LEU production, as well as the resumption of centrifuge manufacturing activities and expansion of manufacturing capacity at its facility in Oak Ridge, Tennessee. The company also submitted an application for a clean energy manufacturing and recycling project associated with re-equipping its manufacturing property in Oak Ridge, and was granted a $62.4 million credit allocation by the IRS under the Qualifying Advanced Energy Project Credit program.
Additionally, the report mentioned the Department of Energy’s National Nuclear Security Administration’s Request for Information for an AC100 Deployment Demonstration to address the need for a new domestic uranium enrichment capability, to which Centrus Energy Corp. intends to respond.
Centrus Energy Corp. also highlighted its issuance of 2.25% Convertible Notes with an aggregate principal amount of $402.5 million, and the intended use of proceeds for general working capital, corporate purposes, potential acquisitions, and other business opportunities.
The company emphasized the impact of the war in Ukraine, the Import Ban Act, and the Russian Decree on market prices for enrichment, prompting calls for public and private investment in new domestic uranium enrichment capacity.
Finally, the report discussed the Energy Act of 2020, which requires the DOE to establish a program to support the availability of HALEU for civilian domestic research, development, demonstration, and commercial application.
This 10-K report provides detailed insights into Centrus Energy Corp.’s financial performance, strategic initiatives, and market dynamics, offering investors and stakeholders a comprehensive view of the company's operations and outlook. As a result of these announcements, the company's shares have moved 33.1% on the market, and are now trading at a price of $108.91. Check out the company's full 10-K submission here.
