Centrus FY24 Full year report Highlights
Financials:
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Strong revenue growth (%revenue growth = 38.04%)
Revenue from the LEU segment rose by 30%, reaching $349.9 mn in Dec 24
Revenue from the CTS segment rose by 80%, reaching $92.1 mn in Dec 24
(Mention in “Business Overview” to show the growing importance of CTS Segment)
(Reason why the growth estimation is incorrect: 14% versus 38%)
Very Strong revenue growth in CTS Segment:
Gross profit for the Technical Solutions segment rose by 151% and reached $17.6 mn
in Dec 24
(Mention in “Business Overview” to show the growing importance of CTS Segment)
(Evidence of Benefit of First-Mover Advantages)
De-lever through pension plan obligations:
the Company entered into several agreements to transfer pension plan obligations for
its qualified defined benefit plans. These transactions culminated the transfer of more
than 1,400 participants and the recognition of a $16.8 mn in actuarial gains.
These initiatives have de-risked the Company's balance sheet by reducing its current
and future liabilities.
Operation, Contract and Government Support:
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Satisfactory Production of HALEU:
Centrus has delivered approximately 545 kilograms of HALEU UF6 to DOE by Nov
24 and was modified to extend the Phase 2 period of performance to June 30, 2025.
It is expected to produce 900 kilograms of HALEU in phase 2.
Contract: DOE has increased the Phase 2 contract value and related funding to $129.0
mm
(Mention in “Government Support”)
Additional 2 HALEU Contracts and 1 LEU Contract (with American Centrifuge
Operating):
1) HALEU deconversion solicitation contract (Oct 24): a minimum value of $2.0 mn
and a maximum aggregate value of $0.8 bn
2) HALEU competition solicitation contract (Oct 24): a minimum value of $2.0 mn
and a maximum aggregate value of $2.7 bn
3) LEU domestic production solicitation contract (Dec 24): a minimum contract value
of $2.0 mn and a maximum value of $3.4 bn over a ten-year period
* Three contracts are backed in aggregate by more than $3.4 bn. ($700 million
included from Inflation Reduction Act is uncertain)
(Mention in “Government Support”)
Wavier to import LEU from Russia:
1) First Wavier (Jul 24): DOE allowed Centrus to import LEU from Russia for
deliveries already committed by the Company to its U.S. customers in 2024 and 2025
2) Second Wavier (Oct 24): DOE allowed Centrus to import LEU from Russia for
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deliveries already committed by the Company to its foreign customers in 2024 and
2025
Applied for the Third Wavier in Dec 24, but no result yet (Feb 15)
Collaboration with TENEX:
In November 2024, Russia revoked TENEX's general license to export LEU to the
U.S., requiring specific licenses for each shipment through 2025. TENEX has secured
three licenses so far, allowing Centrus to fulfill delayed orders for customers. TENEX
plans to seek more licenses for future deliveries, but there’s no guarantee they will be
issued, issued on time, or remain valid before shipments.
(import of LEU can release some stress in the short term, but not in the long term) –
RISK?
Investment Tax Credit:
October 24: Centrus has requested an allocation of $62.4 mn based on a qualified
investment in eligible property of $208.0 mn made by Centrus.
January 10, 25: the IRS has granted request for credit allocation
Centrus now has two years to provide evidence that the requirements of the credit
have been met.
Backlog:
The company total backlog is $3.7 bn in Dec 24. and extends to 2040.
LEU Segment backlog (Dec 24): $2.8 bn
Technology Solutions business backlog (Dec 2024): $900 mn
Other:
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2.25% Convertible Senior Notes:
Centrus issued $402.5 mn of 2.25% convertible senior notes due November 2030.
Purpose: investment in technology development or deployment, repayment or
repurchase of outstanding debt, capital expenditures, potential acquisitions and other
business opportunities and purposes.