covid adds to inventory shortages The Kazakh uranium producer's operational and financial results for the first-half of the year were strong, Pirmatov said, with revenue increasing 54% year-on-year, driving a nearly 30% increase in operating profit and more than a 30% increase in adjusted net profit. Production volumes were similar to the first half of 2020.
The impact of COVID-19 continued to be felt across the industry, and though near-term supply continued to decrease, market sentiment has remained cautious, he said. The company announced in July plans to maintain 2023 uranium production at a similar level to 2022, removing over 5000 tU from the global supply picture. "However, in a world that is expanding its use of nuclear power, we would much rather be seeing a market that is demanding more uranium supply," he said.
The COVID-19 situation is still developing, with a rise in Delta-variant COVID-19 cases in July at some centres, including Nur-Sultan, Almaty and Shymkent, sending them back into government-mandated lockdowns or restrictions in August. The company's vaccination level far exceeds that of the country as a whole: 87% of employees at the Group’s uranium mining entities had received a first dose of COVID-19 vaccine as at 23 August, with more than 74% being fully vaccinated with two doses, when nationally about 27% of Kazakhstan’s population had received a first dose. There has been no significant effect on the group's revenues and deliveries, and it met all of its sales commitments in the first half of the year, it said.
Kazatomprom's uranium production for the first half of 2021 was 10,451 tU on a 100% basis (5864 tU attributable), comparable to the same period of 2020. However, inventories have fallen year-on-year: the consolidated group inventory of finished U3O8 products as of 30 June 2021 was 8864 tonnes, 20% lower than at 30 June 2020, while at the company level, the inventory of finished product was 6773 tonnes, 26% lower than June 2020. This decrease in inventory was mainly related to a higher sales volume in the first half of 2021, and a lower inventory level at the beginning of 2021, the company said, but added that inventory could fall below its targeted level of about six to seven months of annual attributable production in 2021 and 2022, due to COVID-related production shortfall.
"Several transactions to purchase material in the spot market were carried out, and the company may buy additional material in the spot market during the second half of the year in order to keep its inventories within the targeted range and to meet sales commitments for the rest of 2021," it said.