24 March 2011 | 15:06

Japanese quake to affect KazAtomProm

A Fukushima-1 power station disaster that followed the quake in Japan will have an affect on national atomic company KazAtomProm, Fitch Ratings agency’s official website reports. As per the agency’s analysts, the effect of Fukushima-1 disaster on KazAtomProm and URENCO may be more serious and long-term if the nuclear energy regulation is toughened and construction of new nuclear power stations is halted. URENCO (A/Stable) deliveries of enriched fuel to the damaged Japanese reactors account for about two percent of the groups forecasted deliveries in 2011-2013. KazAtomProm (BBB-/Stable) is expected to feel a stronger financial pressure in the nearest future because “the company activities are subject to higher market risk”. URENCO supplies to Japan account for less than 10 percent of the total forecasted supplies of enriched uranium in 2011-2013, according to Fitch. 2009 data shows that KazAtomProm’s uranium deliveries to Japan were responsible for 11 per cent of the company’s total revenue. According to Fitch, if KazAtomProm stops its deliveries to its Japanese consumers in 2011, the total debt leverage of the company will increase by 0.3x-0.4x. 60 percent of KazAtomProm sales are made at spot uranium prices, whereas URENCO enriched fuel contracts are made in fixed prices with a possibility of increase. Both companies do their business based on long-term contracts. Uranium prices fell down to 50 dollars in the last few weeks. Fitch is expecting the prices to remain volatile in the nearest time.

A Fukushima-1 power station disaster that followed the quake in Japan will have an affect on national atomic company KazAtomProm, Fitch Ratings agency’s official website reports. As per the agency’s analysts, the effect of Fukushima-1 disaster on KazAtomProm and URENCO may be more serious and long-term if the nuclear energy regulation is toughened and construction of new nuclear power stations is halted. URENCO (A/Stable) deliveries of enriched fuel to the damaged Japanese reactors account for about two percent of the groups forecasted deliveries in 2011-2013. KazAtomProm (BBB-/Stable) is expected to feel a stronger financial pressure in the nearest future because “the company activities are subject to higher market risk”. URENCO supplies to Japan account for less than 10 percent of the total forecasted supplies of enriched uranium in 2011-2013, according to Fitch. 2009 data shows that KazAtomProm’s uranium deliveries to Japan were responsible for 11 per cent of the company’s total revenue. According to Fitch, if KazAtomProm stops its deliveries to its Japanese consumers in 2011, the total debt leverage of the company will increase by 0.3x-0.4x. 60 percent of KazAtomProm sales are made at spot uranium prices, whereas URENCO enriched fuel contracts are made in fixed prices with a possibility of increase. Both companies do their business based on long-term contracts. Uranium prices fell down to 50 dollars in the last few weeks. Fitch is expecting the prices to remain volatile in the nearest time.