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(Alliance News) - Yellow Cake PLC on Tuesday reported lower net asset value in the six months that ended September 30, the first half of its financial hear, amid lower uranium prices.
The Jersey-based investment company offers exposure to the uranium spot price, through long-term holdings of physical uranium and commercial activities related to the mineral asset.
Yellow Cake reported a half-year loss after tax of USD87.6 million, swinging from a USD458.8 million profit a year prior.
Net asset value per share was USD8.28 at September 30, down 4.7% from USD8.69 at March 31. Total NAV also was down 4.7%, to USD1.80 billion from USD1.88 billion.
Yellow Cake reported a half-year uranium investment loss of USD81.0 million versus a USD462.9 million gain a year before.
Yellow Cake said its physical uranium holdings increased to 21.7 million pounds from 20.2 million pounds six months prior. The value of its holdings rose accordingly to USD1.77 billion on September 30 from USD1.75 billion on March 31.
Yellow Cake attributed this to a 1.5 million-pound uranium shipment received in June from the Kazakhstan-based National Atomic Company Kazatomprom JSC, with which Yellow Cake has a ten-year framework agreement.
The shipment was originally purchased in October 2023 for around USD100.0 million, and was funded through an oversubscribed share placing that grossed around USD125 million.
Yellow Cake said the shipment's value was offset partly by a drop in uranium's spot price per pound, which declined 6.0% to USD81.75 from USD87.00 in the last six months.
Yellow Cake's overall NAV was reduced by the cash used to buy the uranium to subsequently lost value. Cash assets declined to USD26.5 million from USD133.2 million in the half-year.
Kazatomprom, currently the world's primary uranium producer, said in August that "2025 production would fall well short of previous guidance as sulphuric acid availability and construction schedules lagged".
Yellow Cake acknowledged this could hurt market activity in the fourth-quarter. Still, uranium spot market activity appeared to be rising, the company said, "as financial entities, trading companies, nuclear utilities, and possibly uranium production companies enter the near-term market to secure material as prices firm".
Yellow Cake predicted total transactional volume for 2024 in line with the previous year at around 50 million pounds. The company added that utility contracting remained "subdued", whilst the term uranium price continued to strengthen, with the US particularly affected due to recent limits on nuclear fuel exports from Russia to the US.
"We expect to see some near term price volatility, but expect the supply-side constraints to force a further correction at some stage," said Chief Executive Officer Andre Liebenberg.
"Recent comments by Vladimir Putin threatening to restrict the sale of enriched uranium to the west, highlight both the challenge and the opportunity for the uranium price. We believe that the current market situation represents an excellent opportunity to rebuild stakes in physical uranium."
Yellow Cake currently holds 21.7 million pounds of uranium in French and Canadian storage facilities, operated respectively by Chatillon, France-based nuclear fuel company Orano SA, and Saskatchewan, Canada-based uranium provider Cameco Co.
Yellow Cake shares were down 1.7% at 538.00 pence each on Tuesday afternoon in London.
By Holly Munks, Alliance News reporter
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