Uranium miner Energy Resources of Australia posted record earnings in 2009, thanks to higher world prices finally hitting the bottom line through higher-priced supply contracts.
The company expects to see a repeat of that performance this year, but that won’t become apparent until the second half of the year.
ERA, controlled by Rio Tinto, said on Friday earnings were $272.6 million, up from $119 million previously (on an underlying basis).
Earnings before interest and tax (EBIT) were $374.8 million (2008: $318.0 million).
"In 2009 underlying earnings of $272.6 million were the same as net profit after tax. In 2008, underlying earnings were $119 million, with net profit benefiting from an insurance settlement related to events in 2006 and 2007 partially offset by exchange losses on US dollar debt," the company explained in Friday’s release.
Sales of uranium oxide for the year were 5,497 tonnes (2008: 5,272 tonnes), the third highest in ERA’s history.
"Revenue from the sale of uranium oxide for the year was a record $767.8 million (2008: $495.6 million), while total revenue and other income rose to a record $780.6 million (2008: $691.8 million)."
ERA says sales revenue rose mostly due to an increase in the average realised sales price.
It realised an average sales price of uranium oxide of $US50.84 per pound in the year, up from $US32.53 per pound in the previous year.
That improvement partially made up for past years when earnings were held back by low contract prices signed decades ago.
Those contracts have been gradually expiring and ERA and its customers have been writing new ones with better pricing.
ERA said the outlook for the uranium market remained bright due to sustained government interest around the world in nuclear energy as a viable source of power.
It said production and sales in 2010 are likely to be broadly similar to previous years, but weighted to the second half.
"While production, sales and average realised sales price in 2010 are expected to remain broadly similar to recent years, production and sales will be significantly weighted towards the second half as an effect of mine sequencing, lower grades and scheduled maintenance in the processing plant in the first half," it said.
However, ERA warned that higher spending on scheduled maintenance costs and expenditure on development projects will have an adverse impact earnings over the year.
ERA declared a final dividend of 25 cents per share, up from 20 cents in 2008, making a total for the year of 39c (28c in 2008).
Rio produces its full 2009 financial result next week.
