Cameco 2026 Q2 Earnings Call

Good morning everyone. Welcome to Cameco's second quarter 2026 conference call. I would like to acknowledge that we're speaking from our corporate office in Saskatoon, Saskatchewan, Canada, which is on Treaty 6 territory, the traditional territory of the Cree people and the homeland of the Métis. With us on today's call are Tim Gitzel, Chief Executive Officer, Grant Isaac, President and Chief Operating Officer, Heidi Shockey, Senior Vice President and Chief Financial Officer, Rachelle Girard, Senior Vice President and Chief Corporate Officer, and Dominic Kieran, Global Managing Director of Cameco UK. Tim will provide some commentary to start the call. We will then open it up for your questions. Today's call will be approximately one hour, concluding at 9:00 A.M. Eastern Time. Our goal is always to be open and transparent with our communication.

If you do not have time to get into your questions during this call, or if you'd like to get into detailed financial modeling questions about the quarterly results, we'd be happy to respond and follow up to any inquiries. There are a few ways you can contact us with additional questions. You can reach out to the contacts provided in our news release. You can submit a question through the Send Us a Message link in the Invest section of our website, or you can use the Ask a Question form at the bottom of the webcast screen. We will be happy to follow up after the call. If you join the conference call through our website event page, there are slides available which will be displayed during the call.

For your reference, our quarterly investor handout is also available for download in a PDF file on our website at cameco.com. Today's conference call is open to all members of the investment community, including the media. During the Q&A session, please limit yourself to two questions. Then return to the queue. Please note that this conference call will include forward-looking information, which is based on our current assumptions. Actual results could differ materially. You should not rely on forward-looking statements. We do not plan to update them after this call, except as required by law. For more information on the assumptions we've made and the risk factors involved, please see our most recent annual information form and MD&A. With that, I will turn it over to Tim.

Well, thank you Cory. Good morning everyone. Thank you for joining us to discuss Cameco's second quarter and first half 2026 results. Well, the year is flying by. It's the middle of summer here in Saskatchewan, Canada, which is really the inflection point where people here have stopped complaining about the past cold winter. They start worrying about the upcoming cold winter. As we move past the halfway point of the year, I want to start by reinforcing the consistent message you've heard from us for a while now. Our strategy is built for long-term value creation. Our decisions and activities will be centered around that strategy. As a result, we are currently on track with our expectations for the year. Year to date, we've seen the support for nuclear energy not only growing, becoming more tangible.

Around the world, governments, utilities, energy-intensive industries, and the public are recognizing that nuclear energy is essential to energy security, national security, economic competitiveness, and decarbonization objectives. We see that recognition translating into policy support, new build discussions, life extension decisions, uprates, fuel security initiatives, and improved public perception. Here in Canada, the federal government released its nuclear energy strategy in June. The strategy highlights the role that nuclear is expected to play in achieving national energy security and economic objectives while supporting emissions reduction. In the U.S., the Department of Energy's conditional commitment to support deployment of AP1000 reactors is another very important indicator of the growing alignment between policy, proven and deployment-ready Gen III+ technology, and the need to execute. We've said many times that the next phase of nuclear growth will be defined by delivery.

Ambition matters, execution is what brings megawatts into the grid, important to us at Cameco, brings fuel requirements into the market. That's why we continue to believe that the value of proven technologies, experienced operators, and established supply chains will be critical to the equation as the sector moves from aspiration to implementation. For Cameco, that alignment is very constructive. We are positioned across the nuclear fuel cycle with Tier 1 uranium assets in stable jurisdictions, fuel services capabilities, strategic investments in Westinghouse and Global Laser Enrichment, and strong long-term customer relationships built over decades. On the uranium and fuel market side, conditions continued to improve in the first half of the year. The long-term uranium price strengthened to decade highs. We saw increased on-market and off-market contracting activity. Customers continued to focus on security of supply, with notable interest from both sovereign and commercial fuel buyers.

At the same time, our contracting discipline remains one of our key competitive advantages. We continue to be patient and selective in committing supply. We layer in volumes where we see contracts that support our strategy and where we believe we can incorporate an appropriate level of downside protection with exposure to improving future market conditions. That discipline matters because sustainable supply does not simply appear because demand is growing. It requires long-term contracts to back long-term investments planned by capable and experienced operators. Over the next five years, we have contracts in place for average annual deliveries of more than 28 million pounds of uranium per year. As the market continues to improve, we expect to continue layering in volumes that capture greater future upside. We continued on a positive contracting trajectory in Q2.

Quarterly results in our business will always reflect the normal variability of customer delivery schedules, product mix, and the timing of activity across the fuel cycle. The second quarter of 2026 was no exception. Our financial results were lower than the strong second quarter and first half that we reported last year, largely because 2025 included a significant contribution from Westinghouse related to its participation in the Dukovany reactor construction project in the Czech Republic. Looking past the impact of that payment, the underlying fundamentals of our business remain strong. A few of our outlook metrics changed as a result of the strength of the US dollar, which drove a change to our exchange rate assumption. Average realized prices continued to improve in both our uranium and fuel services segments, our annual production outlook is unchanged.

The unchanged 2026 plan calling for our share of production to be between 19.5 and 21.5 million pounds of U3O8 is important. That's because to date in 2026, we've been reminded that safely operating complex, heavily regulated uranium mining and milling assets in remote northern Saskatchewan is never without challenges. Spring road conditions affected northern supply routes during the quarter, contributing to temporary unplanned operational disruptions at Key Lake and McArthur River. Subsequent to quarter end, we also experienced operational challenges that had Cigar Lake production suspended for a couple of weeks. While we were able to address and overcome those unexpected developments with no impact on annual outlook, they were good reminders of why we have built flexibility into our supply strategy and why operating experience, risk management, and credible teams matter so much in this industry.

Our assets are world-class, they are by no means simple assets. They require disciplined planning, technical capability, and constant attention to safety and reliability, that's what our teams across the company bring to the table every day. During the quarter, we closed our agreement to increase our ownership interest in the Cigar Lake mine. The high-grade Cigar Lake mine is one of the most important uranium mines in the world, increasing our interest reinforces our commitment to own and operate the scarce, proven Tier 1 assets that we expect will be essential in supporting the growth of nuclear energy. In our Westinghouse segment, performance in the first half was strong, as I said, once you look past the benefit that we realized related to the Dukovany project last year.

As an operating business with deep exposure across the nuclear power value chain, Westinghouse is embedded in the day-to-day needs of the global nuclear industry while also being well-positioned to drive the next wave of new nuclear capacity through its AP1000, AP300, and eVinci technologies. New nuclear capacity creates long-term demand for uranium and conversion and fuel fabrication and related services. That's why Westinghouse is so strategically important to our broader growth thesis. It gives us exposure to the full nuclear fuel cycle and to the technologies that can help shape the next era of nuclear deployment. Our message for the second half is straightforward. Our annual plan remains intact, the market continues to strengthen, Cameco's long-term strategic position is becoming even more compelling. We have flexible supply, a strong balance sheet, disciplined capital allocation, and decades of experience operating assets in jurisdictions that customers can rely on.

We believe the risks to supply continue to outweigh the risk to demand, we are not prepared to dilute the value of our assets by committing supply into contracts that do not appropriately reflect the durability of market fundamentals. With Tier 1 assets, strategic investments across the fuel and reactor life cycles, strong customer relationships, and a proven operating track record, Cameco is uniquely positioned to support the continued growth of nuclear energy while creating sustainable long-term value for our shareholders, customers, and communities. Thank you for your continued interest and support. Before moving to questions, I want to recognize Dominique Minière, who has stepped down from Cameco's board of directors effective July 26th, 2026, to focus on his other professional commitments.

Mr. Minière has served as a director since 2023 and has been a member of the Human Resources and Compensation Committee, the Technical Committee, and the Safety, Health, and Environment Committee since he joined the board. On behalf of the board and management team, I want to thank Dominique for his contributions to Cameco, we wish him continued success in his many pursuits. With that, operator, we are now ready to take questions.