Paladin share price slips despite 57% revenue boost

Let's take a close look at the results.

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Key points

  • The Paladin share price failed to power up even as it posted a big increase in revenue and improved net loss after tax 
  • The miner's FY22 revenue increased 57% to US$4.7m while statutory net loss narrowed by 39% to US$26.7m 
  • The miner didn't give much in the way of an outlook but its share price performance is more likely tied to macro events 

The Paladin Energy Ltd (ASX: PDN) share price was largely unmoved this morning even as the surge in uranium prices boosted its FY22 results.

The miner posted a 57% increase in full-year revenue to US$4.7 million as its statutory net loss after tax improved 39% to US$26.7 million.

The Paladin share price dipped 1 cent in early trade to $0.81 while the All Ordinaries (ASX: XAO) added 0.2%.

Summary of Paladin's FY22 results

  • Average selling price for Paladin's uranium in FY22 was US$47 a pound, or 57% above FY21
  • Amount of U3O8 sold was flat at 100,000 pounds
  • Cost of sales increased by 58% in FY22 to US$4.7 million
  • Net loss after tax from continuing operations improved 25% to US$43.9 million

What you need to know about Paladin's FY22 results

The net loss from continuing operations was mainly due to higher foreign exchange losses of US$8.2 million (2021 loss was US$3.9 million). This primarily relates to the increase in Australian dollars held after the completion of the equity raising.

The loss was offset by the reduction in financing costs from the redemption of senior secured notes. The 13% depreciation of the Namibia dollar to the US currency also helped. Paladin's flagship Langer Heinrich mine is in Namibia.

One of the key achievements for the miner in FY22 was winning the tender to supply uranium to a major North American power utility.

A shortfall in supply of power, energy security and the big global drive to cut carbon emissions have driven up the price of uranium over the past year.

What Paladin is saying

Paladin's chief executive, Ian Purdy, commented:

Nuclear energy provided approximately half of the USA's carbon-free electricity in 2021, making it their largest domestic source of low carbon energy.

Nuclear expansion remains a focus in Asia, with 35 reactor builds underway across the region. Europe and North America are focused on preserving existing nuclear assets and looking to the future via new reactor programs that include the deployment of small modular reactors.

Outlook

Paladin didn't provide much of an outlook in its FY22 results. It only pointed to its decision to restart activities at its Langer Heinrich mine and its commitment to maintaining its spending discipline.

The ramp up of activities at the mine will support "operational readiness and uranium marketing" during this period of high energy prices.

To better capitalise on the buoyant trading environment, Paladin is also restarting its exploration program. It said it will undertake development studies at the Michelin Project in Labrador, Canada.

The truth is the outlook for Paladin is probably more tied to external events. For example, Japan's push to restart its nuclear power plants.

Paladin share price snapshot

Even before Paladin's FY22 results announcement this morning, the Paladin share price has shot up 71% over the past year.

That's well ahead of the All Ordinaries, which shed 6% over the same period.

But Paladin isn't alone in outrunning the broader market. Other ASX uranium miners have also been shooting out the lights.

The Deep Yellow Limited (ASX: DYL) share price jumped 35% while the Boss Energy Ltd (ASX: BOE) share price surged from under 20 cents to $2.62 over the period.

Motley Fool contributor Brendon Lau has positions in Boss Resources Limited and Paladin Energy Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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