EnCore Energy’s Q3 2024 Revenue Can’t Offset Rising Expansion Costs, Posts Steep Losses
enCore Energy Corp. (TSXV: EU) reported its financial results for the third quarter ending September 30, 2024, generating $9.3 million in revenue for the third quarter of 2024, largely driven by the ramp-up of uranium production at its newly operational Alta Mesa In-Situ Recovery Uranium Central Processing Plant in Texas.
The quarter saw enCore fulfilling contract obligations at an average price of $84.85 per pound of U3O8. Compared to the same quarter last year, which saw no recorded revenue as production had not yet begun, this performance marks a significant milestone.
However, cost of goods sold for the third quarter reached $10.6 million, exceeding total revenue and leading to a gross loss of $1.4 million. The company’s nine-month results further underline this trend, with $47 million in cost of goods sold compared to $45 million in revenue, resulting in a gross loss of $2 million for the period.
Operating expenses also rose sharply as enCore continued investing heavily in its expansion. For the third quarter, operating expenses amounted to $13 million, nearly doubling from $7 million in Q3 2023. This surge reflects the cost of developing wellfields, preparing facilities, and conducting extensive exploration activities across Texas and Wyoming.
The launch of the Alta Mesa facility, which became operational in June 2024, has significantly impacted these expense levels as enCore ramps up production capacity. For the nine-month period, expenses climbed to $29.1 million, up from $21.8 million in the corresponding period last year.
As a result of the high costs, enCore reported a $14.4 million operating loss in Q3 2024, more than doubling the $7 million loss recorded in the same quarter the previous year. For the nine months ending September 30, 2024, the company’s operating loss reached $31.2 million, a considerable increase from the $21.8 million loss in the same period of 2023.
This leads to the company’s comprehensive loss attributable to shareholders dropping to $13.9 million in the third quarter compared to a gain of $7.1 million in Q3 2023. For the nine-month period, comprehensive loss rose to $32.4 million, a substantial increase from the $6.7 million loss recorded in the same period last year.
Looking forward, enCore remains optimistic about the uranium market and its own positioning within it. Demand for uranium is expected to grow, particularly with the nuclear sector’s expansion as a clean energy solution. The favorable contracting conditions and long-term uranium prices above the current spot rate of $77 per pound could provide enCore with a revenue boost if it can achieve the required production scale.
enCore Energy last traded at $4.95 on the TSX Venture.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
