Cameco Corporation 2026 Q3 Earnings Call

Please go ahead. Thank you, operator, and good morning, everyone.

Welcome to Cameco's Third Quarter 2026 Conference Call. I'd like to acknowledge that we are speaking from our corporate office in Saskatoon, Saskatchewan, Canada, which is on Treaty Six 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, and Rachelle Girard, Senior Vice President and Chief Corporate Officer. Tim will provide some commentary to start the call, as we do, and we will then open it up for your questions. Today's call will be approximately 1 hour, concluding at 9:00 A.M. Eastern Time. Our goal is to be open and transparent with our communications, so if we do not have time to get to your questions during this call, or if you would like to get into detailed financial modeling questions about our quarterly results, we would be happy to respond to any follow-up inquiries.

There are a few ways to 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, and we'll be happy to follow up after the call. If you joined this conference call through our website events page, there are slides available, which will be displayed during the call.

For your reference, our quarterly investor handout is also available for download 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 2 questions and then return to the queue. Please note that this conference call will include forward-looking information, which is based on our current assumptions, and actual results could turn out differently. You should not rely too heavily on forward-looking statements, and we do not plan to update them after this call, except as required by law. For more details on the assumptions we've made and the risk factors involved, please see our most recent annual information form and MD&A. I will now turn it over to our CEO, Tim Gitzel.

Tim? Well, thank you, Corey, and good morning, everyone.

Well, Halloween isn't until tomorrow, but here in Saskatoon, Saskatchewan, Canada, we've already had our first little scare of the season, with winter showing up with some snow on the ground this week. I suppose those of us who have lived here our entire lives shouldn't be surprised. It happens every year, but somehow we get surprised. Fortunately, there were fewer surprises in our third quarter results. They were largely in line with what we expected, reflecting the planned activities and outlook we've discussed throughout the year. Let me begin with a brief look at our third quarter and nine-month results. I'll then place that performance in the context of the improving fundamentals for nuclear energy and the disciplined strategy that continues to guide our decisions.

Results for the quarter and for the first nine months of 2026 were lower than the same period last year, which was expected. A few significant items affected the year-over-year comparisons for the quarter and year-to-date, including the longer planned maintenance outage at the Key Lake mill. As we've indicated throughout 2026, the work at Key Lake included several larger projects designed to support the flexibility of the asset and sustainable long-term operations. As anticipated, the outage resulted in lower production volumes for the quarter and year-to-date, along with higher costs this quarter. Last year, Westinghouse also received a significant payment related to the Korean Dukovany nuclear project in the Czech Republic, impacting the comparison of financial results for the first nine months. As with most, if not all industries, we also continue to experience and manage through the inflationary pressures seen globally.

A few other items of note to highlight in the results. As we get closer to the end of the year, we've adjusted the range for some of our guidance metrics. We've narrowed our expectation for our share of uranium production from Cigar Lake and McArthur River/Key Lake to between 19.5 million and 20.5 million pounds. We've tightened the expected range of annual uranium deliveries to between 29.5 million and 30.5 million pounds. With the operational guidance adjustments comes a fine-tuning of financial guidance, including increased direct admin costs and higher average unit costs of sales. We also lowered expected CapEx spend for the year due to certain mining and fuel services projects and work being pushed beyond the end of the 2026 calendar year. You'll note in our Q3 MD&A that we again included some longer-term modeling details pertaining to the Westinghouse segment.

Information in that section of the report is substantially similar to what we'd provided in Q2, with a few immaterial updates. However, we decided to include the information again this quarter, as we noted in conversations over the summer, that those important incremental disclosures may not have been thoroughly absorbed by our stakeholders. Finally, in 2024, we had set out a three-year dividend growth plan to recognize the return to a Tier-one production rate. Under that plan, by 2026, we expected to double the CAD 0.12 dividend paid in 2023. We achieved that doubled dividend a year early, paying out CAD 0.24 per share last year in 2025, thanks in part to the payment Westinghouse received for the Korean new build in the Czech Republic.

For 2026, in line with the principles of our capital allocation framework and that plan set out in 2024, our board of directors declared a 2026 annual dividend of CAD 0.24 per common share. As I said, our performance and outlook continue to be guided by the same disciplined strategy and the strength of our diversified nuclear energy platform. Let's move on and put those results in the context of the current and future demand environment to highlight why we believe Cameco is exceptionally well-positioned. We've seen considerable volatility across markets, sectors, and industries, and nuclear-related equities have certainly not been immune. Share prices across uranium, fuel cycle, reactor suppliers, and the broader nuclear industry have moved sharply as investors reassess risk and evaluate technology sector expectations and more speculative elements of the energy trade.

Some are questioning whether enthusiasm around artificial intelligence, data centers, critical minerals, and new nuclear has moved too far ahead of execution. That's a reasonable distinction to make. Not every announcement becomes a project, and not every forecast becomes firm demand. But we can't confuse volatility in thematic equities with a change in nuclear fundamentals. Capital can easily rotate out of a theme in a day or in a week. It takes much longer to replace a depleted uranium reserve, to build, license, and commission a fuel cycle facility, to establish a Western nuclear supply chain, or to bring a new reactor into service. As an industry, those are the big opportunities that we need investors managing the capital we require to appreciate and support.

The nuclear story is underpinned by the existing reactor fleet, long-term utility fuel requirements, tight Western fuel cycle capacity, energy security priorities, and the need to replace depleting and geopolitically constrained supply. Reactors continue to consume fuel every day, regardless of equity flows or short-term spot price movements. Life extensions, restarts, uprates, and new reactors already under construction add requirements on top of that established demand base. Artificial intelligence and data centers can provide meaningful upside, but they are not the foundation of the nuclear investment thesis, nor are they a load-bearing assumption in our strategy. The technology sector is projecting a need for very large amounts of reliable, around-the-clock electricity, and nuclear is well-suited to those requirements. But forecasts for AI-related electricity demand vary considerably, and outcomes will depend on the pace of development.

Data centers under construction today will need power sooner than most new large reactors can be delivered. So, in the near term, some of that load growth will be met through gas, renewables, storage, grid upgrades, and nuclear uprates and life extensions. We nevertheless remain confident that demand from the technology sector is coming, and we're excited about it. After all, AI and data centers represent meaningful upside across uranium, fuel services, reactor services, and new build. But Cameco's base case remains grounded in the reactors, contracts, and fuel requirements that exist today, underpinned by those life extensions, restarts, and uprates, along with electrification, onshoring of manufacturing, and decarbonization. We already have an incentive to focus on fuel security requirements and the need for disciplined execution in replacing declining supply. When it comes to adjusting for the risks, investors must separate volatile headlines from the work required to execute.