A Westinghouse Electric sign is seen during the China International Import Expo in Shanghai, China, Nov. 6, 2018.ALY SONG/Reuters
Patrick Fragman is stepping down as chief executive of Westinghouse Electric Company, a Canadian-controlled global nuclear services business that lost close to half a billion dollars in the first nine months of last year.
Pennsylvania-based Westinghouse, which is owned by Saskatoon-based Cameco Corp. CCO-T and Brookfield Asset Management BAM-T, said in a release on Thursday that Mr. Fragman is leaving the company at the end of March to spend more time with his family
Former operating plant services president Dan Sumner is taking on the role of deputy CEO, and will become interim CEO after Mr. Fragman leaves. The company said that it has started looking for a new permanent CEO replacement.
Mr. Fragman had been CEO since 2019, and there had been little indication that he was planning on leaving. Westinghouse chair Mitch Davidson in a statement thanked him for turning the company around, saying he positioned it to be a leading innovator and developer of nuclear technology.
The company has been involved in the nuclear sector for 75 years as a provider of nuclear original equipment manufacturer, parts maker and provider of engineering services. Nearly half of the world’s operating nuclear plants run on its technology. Its clients include utilities and governments.
Cameco, one of the world’s biggest uranium mining companies, and Brookfield Asset Management announced the acquisition of Westinghouse in late 2022 for US$4.5-billion, but it took about a year for the deal to close. The seller was another unit of Brookfield, Brookfield Business Partners, which had made a six-fold return on its investment.
Brookfield Asset Management owns a 51-per-cent stake in Westinghouse, with Cameco holding the remaining 49 per cent. They also control the board of Westinghouse.
Cameco has targeted 6 to 10-per-cent annual growth rate in earnings before interest, taxes, depreciation and amortization at Westinghouse over five years. But at the moment, the company is losing lots of money on a net-income basis.
Cameco disclosed in its quarterly earnings in November that Westinghouse booked revenue of $4.18-billion and a net loss of $463.8-million during the first three quarters of 2024. Cameco’s share of that loss was $227-million.
Tim Gitzel, Cameco’s chief executive, declined an interview request. Simon Maine, a spokesperson for Brookfield Asset Management, declined comment.
Cameco operates major uranium mines in Saskatchewan that supply the nuclear fuel to power plants worldwide. The acquisition of Westinghouse provides some diversification away from the direct uranium fuel market.
But the Westinghouse transaction was also pitched as giving Cameco the ability to compete more aggressively in the nuclear fuel business through Westinghouse’s extensive network in the industry.
Uranium last year had a major run to above US$100 a pound, but then corrected back to around US$73 a pound. While the spot price of uranium drives sentiment for uranium stocks, what Cameco receives for selling the commodity is tied to longer term contract prices with customers.
The rally in the nuclear industry has also led to some mergers and acquisitions activity. Canada’s Fission Uranium Corp. was recently acquired by Australia’s Paladin Energy Ltd. for $1.14-billion. Fission is developing the Patterson Lake South uranium project in the Athabasca Basin region of Saskatchewan, which is projected to eventually account for about 5 per cent of global supply.
The nuclear power industry went into a protracted slump after the 2011 earthquake and tsunami in Japan led to the meltdown of the Fukushima plant. Many projects were cancelled after the catastrophe.
However, investor interest in the uranium sector has picked up over the past few years, in large part because nuclear power is increasingly pitched as a clean energy source that does not generate carbon emissions. Still, worries persist over the challenges of the long-term storage of radioactive waste and the possibility of another accident at a power plant.