Japan: Following the Fukushima accident…

March 18, 2011

In yesterday’s post, we took a look at some of the early disclosures that companies have made since the earthquake and tsunami hit Japan March 11. But what about the nuclear angle? Well, we’re starting to see disclosures about that, too.

One of the first documents filed with the SEC was this 8-K filed by Uranium Energy Corp. (UEC). After mentioning the recent increase in the spot price of uranium, as well as increased demand across all sectors, the filing added:

“Since then, the uranium spot market has seen seesaw movement with the current trend being down as a result of several factors, the latest being the devastating earthquake in Japan and the resulting unforeseen developments at the Fukushima Nuclear Power Plant. As this news and reaction to it changes very quickly, the uranium market is quite volatile and the Company is awaiting to see where prices settle out on a more intermediate basis. Similarly, over the past year, the longer term contract uranium price has risen from $58.00/lb. to $73.00/lb. according to the Ux Consulting Company.”

The next day, EasyLink Services International Corp. (ESIC), a company that sells business messaging and transaction services, mentioned the disaster in the Risk Factors it included in this 10-Q. After stating on p. 23 that – so far – its employees in Tokyo were safe and its office and network were operating, it added:

“However, there can be no assurances that future operations and revenue may not be seriously affected by, among other things, the rolling electrical black outs and industry wide shutdowns now occurring in Japan as well as the potential of a nuclear reactor disaster occurring at a power plant within one hundred and seventy miles of our Tokyo offices. These occurring or potential events may seriously damage our ability to conduct business in Japan or, in the worst case, cause operations to completely cease with our Japanese revenue suffering a material downturn.”

On March 16, Exelon Corp. (EXC) and Exelon Generation Co. LLC (privately held) jointly filed an 8-K and Fact Sheet with the title, “Exelon Plants are Well-Protected From Floods, Earthquakes, and Tsunamis.” No doubt the company wants to reassure the public and its investors – as quickly and publicly as possible – that its 10 nuclear plants (9 of which are in Illinois and Pennsylvania; the 10th is in New Jersey) would withstand a disaster without the horrific problems that are still unfolding at the Fukushima Daiichi Nuclear Power Station in Japan.

After explaining how the plants were built and why their locations make them less prone to disasters caused by earthquakes or tsunamis, Exelon then lays out its back-up systems and the various protections in place, so that – if needed – the plant could be shut down and the fuel cooled safely.

Finally, ON Semiconductor Corp. (ONNN) issued this press release (attached to this 8-K) yesterday to disclose that – although no employees have been injured and its six production sites had sustained “only minimal physical damage” – it expected that infrastructure damage would result in “…a temporary shutdown of operations at the company’s Aizu and Gunma facilities until services can be reliably restored.” The company added that if problems continued that prevented the reliable delivery of water, electricity, and other necessary services, there could be “temporary production disruptions” at other locations, too. It expressed hope that the infrastructure services would improve by the end of the first quarter and stated that, in the meantime, the company would explore whether it could shift some of its production to other facilities.

ON Semiconductor’s filing also disclosed that the company “…could potentially see a negative impact to revenues in the first quarter of 2011” because of the disruption of infrastructure services and the added difficulties of making deliveries within Japan following the disasters. It added:

“The potential negative impact to revenues in the first quarter could be in the range of two to four percent of revenues based on the mid-point of total combined revenue guidance for ON Semiconductor and SANYO Semiconductor of $852.5 million provided on Feb. 3, 2011. We cannot currently predict the impact of the earthquake and tsunami on other guidance provided in our Feb. 3, 2011 earnings release at this time.”

Image source: exquisitur via flickr

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