Good day, ladies and gentlemen, and welcome to Kazatomprom's 2022 full year results conference call. My name is Botagoz Muldagaliyeva, and I'm the director of IR at Kazatomprom. Thank you for taking time on the day to join us. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session through the phone lines in English. Shortly after completion of which, a separate question and answer session for Russian language speakers will follow, and instructions will be provided at that time. The simultaneous translation of English Q&A will be available for Russian speaking line. English line participants can also submit questions through the webcast page using the Ask a Question button. Our call will begin with a presentation by CEO, Mr. Yerzhan Mukanov, followed by an opportunity for your questions.
If you joined through the Kazatomprom website or through our company's page on the London Stock Exchange website, note that there will be slides displayed during the remarks. These webcast slides are also available for download in English and in Russian as PDF called 2022 Full Year Conference Call Slides. Note that our press release full version of the 2022 full year operating and financial review, along with our audited 2022 financial statements for 12 months ended 31st December 2022, are now available on Kazatomprom's website. Participating in today's call we have Yerzhan Mukanov, CEO, Ruslan Beketayev, Chief Financial Officer, and Alisher Taizhanov, Chief Commercial Officer. This call is open to all stakeholders with a question and answer portion intended to be an opportunity for members of the investment community to engage with the management team and ask their questions.
This conference call may include forward-looking statements. These statements include all matters that are not historical facts. By their nature, forward-looking statements involve risk and uncertainty, and they are not guarantees of our future performance. The company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved. I will now turn it over to Mr. Mukanov.
Thank you, Yerlan. I am delighted to welcome and thank everyone for joining our conference call today in the review of Kazatomprom's operating and financial results for full year of 2022. Along with discussion of Kazatomprom's 2022 full year results, which were released earlier today, we would like to update stakeholders with our view of recent market developments, including the notable risks and uncertainty that the industry has been managing over the last year. I would like to start today's call with a discussion of the significant events that has recently taken place in both Kazakhstan and internationally. We have seen tremendous and tragic events unfolding in the region since the start of 2022.
Whilst the impact of Qañtar has resulted in a wide range of liberal reforms in Kazakhstan, it's difficult to predict the possible impact and consequences of the Russian-Ukrainian conflict. We still hope a peaceful resolution comes very soon. Although the trade actions and sanctions against Russia that have been put in place by various countries to date have not been directed at the uranium and nuclear industries, Kazatomprom remains prepared for changes to the risk profile. As noted in March 2022 during our annual results call for 2021, the four key areas we are carefully monitoring include Kazatomprom's partnerships and joint projects with Rosatom and its subsidiaries, financial risks and exchange rates fluctuations, supply chain challenges, and the availability of key operating materials, and risks to our primary transportation routes through Russian territory.
A high priority risk analysis is being carried out on a continuous basis with respect to compliance with the sanctions. In addition to the mining operations, the company also has access to uranium enrichment services at the Russian enrichment plant. The risk of secondary sanctions impacting Kazatomprom in connection with Rosatom and the Russian nuclear fuel cycle remains remote at this time. Throughout 2022, it became apparent that our concerns about currency exchange rates and inflationary pressure was not just local, but global too, as both developing and developed economies across the world experienced unprecedented inflation and rate hikes. With respect to the disruption of supply chain and our access to the materials we need to develop oil fields and produce uranium, the situation is under the special control of the management.
We have embarked ambitious programs to build a sulfuric acid plant, a new processing plant, and bring the piping productions in-house. These measures will definitely secure and satisfy a bulk of Kazatomprom's requirements in key materials and equipment. Finally, the area that saw the most attention throughout 2022 was the transit of our uranium products through the territory of Russian Federation. This route has been used as primary route as the usual course of business in 2022, and we don't expect significant challenges. As we have reiterated, discussions with nearly all stakeholders groups, should our access to the primary route become limited for any reason, we have a number of mitigation plans that are ready for deployment. They include the Trans-Caspian International Transport Route, an alternative route successfully used since 2018 that does not enter Russian territory.
Kazatomprom also continues its work on diversifying and improving its transportation capabilities. As such, we are currently working to establish the transportation routes through China and Turkey. It is important to reinforce our message that we will continue to take all necessary measures to minimize potential risks and prevent any potential negative impacts on our business and customers. To date, our risk management processes and mitigation plans to address the existing and emerging risks have remained robust, and the company continues to monitor the situation. Turning to the primary topic of today's call, I'll touch on few key market developments and briefly review our results for 2022. A key factor that has contributed to the improved market fundamentals and a more bullish outlook for the nuclear industry over the past several years has been the international focus on the social and environmental impacts of energy infrastructure.
Those discussions have become even more pronounced amid the growing focus on energy security and diversification in relation to the Russian-Ukrainian conflict. Kazatomprom recognizes the significant role it plays in helping the world transition away from a reliance on fossil fuels. Unlike many other industries that are having to alter the course of their strategies and reassess their value proposition in the ESG context, we, as uranium miners, find ourselves in a unique, positions. ESG has always been well integrated in our business. Environmentally, all of Kazatomprom's mines employ the best-in-class in-situ recovery mining method that minimize impact on the environment, biodiversity, water resources, and public health. In term of governance, we strive to implement international best practices. Recently, we had a fourth independent director joining our board of directors, which now consists of eight members. All the board committees, including audit, are chaired by INEDs.
In line with our long-standing commitment to sustainable development in ESG, the company continues to endorse the medium and long-term ESG goals with specific quantitative and qualitative targets. As such, in 2022, the company approved a strategy for decarbonization and achieving carbon neutrality by 2060, and completed significant milestones within the frame of the ESG Roadmap, aimed at improving environmental and social stability in the regions of the company's presence. In March 2022, we also officially became a full member of United Nations Global Compact, the world's largest corporate sustainability initiative, which confirms our commitment to the 10 principles of the UN Global Compact and support for the global ESG agenda, goals, and initiatives of the United Nations.
As a recognitions of our efforts in ESG, in December 2022, Kazatomprom received its first independent ESG rating from S&P Global Ratings, which assigned Kazatomprom above the industry average score of 51 out of 100. Of note, the current global maximum ESG evaluation score for metal and mining sector is 68. Moving into a brief look at the uranium market, long-term contracting activity in the spot and term uranium pricing gained strength in 2022, with the financial driving the spot. Market participants are shifting their focus to security of supply in light of the Russia-Ukrainian conflict. Demand-side interest drove the weekly spot price as high as $63.75 per pound of uranium in 2022.
However, with the global economic slowdown and the resulting bearish trends witnessed in the capital markets to the third quarter of 2022, the upward pressure on the spot price was eased. Spot price ended the year with $47.68 per pound of uranium in average. Overall, the volume levels of spot fell well behind the upsurge witnessed in 2021. As such, about GBP 60 million were transacted in 2022, with the utilities share in the market constituting just under 14%, or about GBP 8 million of uranium in total. The shift in the utilities approach in the procurement strategies towards the primary producers is even more pronounced given the concerns about the security of supply and energy security triggered by the recent geopolitical turmoil.
The supply reductions by the primary producers witnessed in the prior period now started to take a reversal as some of the producers began to restart their idled capacities, driven by increased long-term contracting activity. To secure the access to non-Russian processing services, more utilities are willing to enter into the long-term commitments with the Western enrichers and converters, stretching their processing capacities, which results in the need for higher volumes of the feed. We at Kazatomprom are well positioned to match up growing feed requirements with a reliable long-term supply of natural uranium. In term of the term market, nearly GBP 140 million of U3O8 was contracted under term deals during the reporting period, which is the highest volume the market has witnessed since 2012.
With the average term price indicator increasing by $52 per pound, the term market continues its rise for the 3rd consecutive year, which hints the entrance of the market into another long-term contracting cycle that takes place around each 10 years. At this time, having set up the trading arm in Switzerland back in 2018 and amendments to the transfer pricing legislation that took place in 2021, we feel comfortable of capturing the relevant share of that cycle in the years to come. Therefore, consistent with our market-centric strategy, we expect our 2024 production volumes of about 25,000 tons-25,500 tons of uranium in 2024, which is roughly 10% lower than our total subsoil use contract level. Our 2023 production plan remains unchanged and 20% lower than our total subsoil use contract level.
Even the target is currently subject to considerable, yet manageable supply chain and development risks. Moving into our 2022 full year results, I am proud to confirm that we once again delivered on our guidance, achieving the targeted indicators. The company's production volume fell slightly on both a 100% and attributable basis during the reporting period, as the COVID-19 pandemic has an impact on wellfield development in 2021. This had a lag effect on production in the reporting period, as it usually takes from 8 to 10 months between wellfield development and the resulting uranium extraction by in-situ recovery. Additionally, attributable production was impacted by the sale of 49% share of Ortalyk LLP to CGN Mining Company UK Limited in July 2021.
At this point in the year, the operations team continues to make progress in mitigating the related risk, making every effort to achieve a production plan for 2023. We have maintained our market share of natural uranium in the reporting period, where we delivered uranium under both new and existing contractual commitments to 24 customers in 11 countries worldwide. As of December 31st, 2022, our inventory of finished uranium was comparable to the inventory level we held at the end of 2021, slightly above our target of about six, seven months of attributable production. To manage delivery risks and ensure we have uranium at the right place and time, we did make some purchases and swaps in the market during 2022. Uranium sales at the group and KAP level were on the same level as in 2021.
Thanks to our commercial team's successful implementations of their sales plan and increase in the spot pricing of uranium, the company's average realized price in US dollars increased by 31%, which also led to an increase in revenue from U3O8 by more than 40%. We are constantly working to grow the company's customers base with ongoing negotiations in Europe, Americas, and the Middle East. On the cost side, our C1 cash cost rose as expected due to higher payroll costs and inflationary pressure on cost of materials and processing, increasing by 16% from just under $9 per pound last year to now just a bit more than $10.
All-in Sustaining costs rose even more by 28% from $12.63 per pound to $16.19 due to a more than 60% increase in capital expenditures of mining companies, subsequent to a shift in wellfield development activities as well as higher purchase prices for materials, supplies, equipment, and cost of delivery. All three costs parameters were within the guidance ranges provided for 2022. As we communicated in our previous trading updates for short-term deliveries to end users, the spot price can vary significantly between the time contracting pricing is established and the spot price in the market when the actual delivery takes place. Given the time allotted by Kazakhstani transfer pricing legislation, the delivery date at which the sales revenue is recorded could be up to 10 months from the offer date.
In addition, some long-term contracts may incorporate a proportion of fixed pricing that was negotiated prior to the sharp increase in the spot price. As such, the increase in average realized price that both the group and Kazatomprom last year was lower than the increase in the spot mark price for uranium due to the significant spot price volatility in the uranium market in 2022 and 2021. During the reporting period, many deliveries were based on contract price mechanisms that established a contract price for the delivery set earlier in 2021 when the market price was lower and prior to its sharp increase. As you can see, taking into account the lag effect, our realized prices converged with the corresponding spot prices in quarter four of 2022.
As per our updated sensitivity table, which provides some color on what our average realized price would be in if the average annual spot price reaches a certain figure, is now much more exposed to index. This certainly represents our success in commercial negotiations with the end users, where we ensure certain floor level to hedge against the falling market. Regardless of such lagging effects between spot price at our realized price, our financial results for 2022 were very strong. Revenue rose compared to the previous period to just above KZT 1 trillion, driving a rise in operational profit of 91% and a more than doubling of Adjusted Net Profit to about KZT 465 billion. This figure was achieved without the significant items having a one-time effect, as was the case in the previous years.
These impressive results reflect the considerable improvement in the uranium market over the past year, supported with our ability to deliver Kazatomprom's materials through the Trans-Caspian International Transport route. Capital expenditures of the mining entities increased by 61% compared to the previous period. As mentioned above, due to increased spendings on well construction to achieve production targets for 2022 and 2023, as well as to prepare for production expansion to -10% from subsoil use contract in 2024. Beyond the operational and financial results, let me highlight several corporate developments. First, Mr. Mazhit Sharipov, Kazatomprom's CEO up until July 4, decided to resign from his role with the company for personal reasons. Subsequent to the reporting period in early January 2023, Mr. Askar Batyrbayev decided to resign to pursue other opportunities, while Ms.
Kamila Syzdykova decided not to return from her parental leave, choosing to spend more time with her family. Alisher Taizhanov was appointed as new Chief Commercial Officer, and Ruslan Beketayev was appointed as new Chief Financial Officer. In July of the reporting period, we completed the payment of dividends for 2021. The 52% increase in the dividend payments included the proceed from the sale of Ortalyk to CGN Mining. To note, net debt to adjusted EBITDA ratio in 2022 remains negative. We'll announce information on dividends for 2022 in April this year. Beyond the company developments, the government of the Republic of Kazakhstan announced the additions and amendments to the country's tax regime as part of its post-Qantar event reforms, according to which the calculation of the Mineral Extraction Tax base and rate have changed, effective 2023.
According to the changes, the MET on uranium is now based on market prices multiplied by the amount of uranium mined at a rate of 6%. MET expense is therefore expected to increase in absolute terms due to the incorporation of the spot price into the formula. However, as disclosed previously, the exact impact cannot be estimated at this time. Finally, as mentioned, we are maintaining our production and sales discipline. Reviewing our outlook for this year in accordance with our market-centric strategy, expected annual production and sales metrics are set at slightly lower level at this time compared to 2022 actuals, while financial metrics of our performance are expected to be higher.
The decrease in production guidance for 2023 in comparison to actuals of the reported period is mainly due to continued delay in the wellfield commissioning schedule and limited access to certain key materials, including sulfuric acid and equipment. The decrease in the expected U3O8 sales volume for 2023, both at the group and Kazatomprom level, is mostly due to the increased sales in forms other than U3O8, including but not limited to fuel pellets produced from Kazatomprom's natural uranium concentrates. Although we do expect the sales metrics to have an upside potential given the increased interest from the demand side of the market.
Guidance on total capital expenditures on 100% basis for this year increased significantly in comparison to 2022 actuals to cover the shift in the wellfield development schedule. Inflationary pressure on production materials and reagents, as well as an increase in well construction activities and mine development cost of JV Budenovskoye LLP and JV Katco LLP for total amount of approximately KZT 70 billion. We remain confident that we can deliver on expectations based on the current trends of productions, sales and costs, as we do assume supply chain and wellfield development risk will not increase significantly through 2023. Nevertheless, it should be noted that the challenging situation with the supply of raw materials and inflationary pressure is expected to continue, which could affect the company's financial operating performance, respectively.
Summarizing today's call, I would like to highlight that despite its recent management changes, Kazatomprom's market-oriented strategy remains unaffected. Our focus will continue to be on the highly marginal segment of the nuclear fuel cycle, which is a uranium mining. As always, we are committed to the highest standards of ESG in all aspects of our business. Open and constant communications are crucial during these times of ongoing uncertainty and elevated geopolitical risks, and we remain committed to business continuity and transparency. We are eager to keep working with new and existing global customers to provide the uranium required to meet the anticipated demand growth and help the world achieve its net zero energy security objectives. Thank you for your interest and attention. We will now be happy to answer questions from today's call participants.
We will now begin the question and answer session in English. Please limit yourself to two questions at a time. If you have additional questions, you are welcome to rejoin the queue. As a reminder, you can also submit questions using the Ask a Question button on the webcast page. To ask a question on the phone lines, please press star one on your device. We will now pause for a moment as callers join the queue. Our first question is coming from Alexander Pearce from BMO. Alexander, please go ahead.
Great. Thank you for giving me time to ask this question. I was actually hoping, could you provide an update on just the capacity of the Trans-Caspian route as it stands? Also maybe you can just comment on some of the alternative routes, for example, with China, and just timing for when we may get an update in terms of, you know, capacity on some of the alternative non-Russian routes. Thank you.
Hello. Thank you for your question. We got a quota for this day. Today, the quota is around 4,000 tons of U3O8, we are still discussing with the Azerbaijan side, Azerbaijan government about this quota for our future deliveries. Thank you.
Is it possible to give us an update on kind of progress on some of the other routes and maybe when we may hear updates?
We are still discussing with our Chinese partners about the transit via Chinese China, and I don't know when, but we are discussing about that.
Okay. Thank you. Maybe I can just follow up with a second question. Just in terms of the CapEx that you've identified for KATCO and Budenovskoye, is it possible to provide a breakdown split between those two assets and how much of that, like, KZT 70 billion mentioned is split between those two projects?
Hi again, Alex. Unfortunately, for the purposes of confidentiality, we can't disclose the split between the two, but you can make your own assumptions on that. Adding to Alisher's point on transshipment through Chinese and Turkey territory, we can say that we are working on these routes and we will keep our investors updated on any progress.
Great. Thank you.
Thank you. The next question is coming from Ildar Davletshin from WOOD & Company. Ildar, please go ahead.
Good afternoon. Thank you. My first question is regarding your 2024 production targets. You are planning quite a considerable increase. I realize it's partially driven by the launch of Budenovskoye and ramp-up at other assets, but I just want to understand how confident you are in this 25,000 or so tons target, given that this year you are expecting a small decline relative to 2022. You did mention skill challenges and supply of some critical materials and lag in drilling activity. It feels like it's a bit stretched, but maybe I'm wrong. I'd like to understand your kind of confidence level in 2024 production target. Maybe if I may, also a second question, just to come back to the previous question on the CapEx.
Could you maybe break down the expected CapEx between maintenance, what you need to maintain flat output, and any additional CapEx that comes on top as a growth CapEx? That would be very helpful. Thank you.
Let me start answering the question and my colleagues can join. The first question was, and thank you for your question, Ildar. The first question was about how confident we are in our production plan for 2023 and 2024. As you can see, Ildar, from our guidance, we are significantly increasing our capital expenditures. These capital expenditures will go both into our current projects and our expanding projects, being JV Budenovskoye and JV Katco. We are quite confident at this moment that we can deliver on our guidance announced previously. Should there be any additional challenges or any additional risks to our production plan for 2023 and 2024, we will most certainly notify the market on this one in our trading updates or in our operating and financial review.
Now turning on to your second part of the question. I heard that was like, if we can provide the split in our guidance of how much our CapEx will be directed into the current operations and well construction and how much will go into the sustaining. On this part, we unfortunately do not provide the split, but basing on our historical results and our results for 2022, you are free to make your own assumptions and make your models. We are also happy to provide you additional help in the way we can do in a fair way to provide you our help.
All right. Thank you.
The next question is coming from Yuyang Zheng from Bank of America. Yuyang, please go ahead.
Hi, everyone. I've just got one question on EBITDA numbers. EBITDA numbers are very strong compared to last year and versus consensus estimates. I can see net cash position seems a bit light. Could you please give us a bit of update around here, please?
Sure. Hi, Zheng. As you can see from our operating and financial report, and you can analyze it, the part on the working capital, there was a shift in the working capital. The working capital itself is pretty cyclical, and there can be time differences between the deliveries and the cash receipts from those deliveries. From the working capital table, you can see that our receivables have increased 23% from the previous year. Part of our decrease in net cash position is attributable to that as well. Also, you can see that our inventory has increased. The inventory that we will use for our day-to-day operations, which will then be converted into the receivables and our revenue. If that answers your question.
Yeah, that's very clear. Thank you.
Thank you. The next question is coming from Anna Antonova from JP Morgan. Anna, please go ahead.
Yes, good afternoon. Thank you very much for the presentation. two questions from our side. First, on the production and sales guidance for this year. Can you please perhaps comment on what are the run rates of production and sales you're seeing in Q1, given that two full months are already behind us? Perhaps how they compare to your expectations and how they are running versus your guidance this year. Are they basically in line or a bit lagging given the seasonality or a bit ahead of your expectations? That's the first question. The second one, could you please comment on the market environment? Has anything changed in your in the market conditions since the last call that you had?
Perhaps do you see any signs of utility companies that are engaging more actively in recontracting talks or not? Any comments on that slide would be also much appreciated. Thank you.
Hi, Anna. Many thanks for your question. Just answering to your first question regarding how was the pace of our sales in accordance to our guidance.
Our sales are not evenly distributed through the years. It mostly depends on the requests of our customers, so on our scheduled deliveries. But like, you know, at the year-end, we plan to be in a range of that we have indicated in our guidance. Secondly, answering to your question, just let me double-check. Your question was, how does utility act now in terms of the geopolitics and if they do restructure their portfolio of purchases, right?
Yes. If you could shed some light on, what's the market sentiment now? Is it better or worse than in the end of last year? What's mainly, maybe main trends that you're currently seeing in the market that you would like to highlight to us? Thanks.
Yeah. Thank you. Like, you know, the steel is the most among the nuclear fuel cycles, stages of conversion enrichment has still been mostly in focus, given the current geopolitics. What we see that their existing supply chains of our nuclear fuel cycles are being reengineered. Because despite there is no sanctions against nuclear fuel cycle, against the components of Russian nuclear fuel cycle, some of the utilities are trying to look for different suppliers of conversion and enrichment services. Still what we see, utilities still focus on it. They're just looking for different opportunities, how they can contract for themselves, those services. After that, they would go from the top to the down.
Like, you know, for start closing to go through the enrichment first, then they go to the conversion, after that they'll go to uranium. The usual way that we do produce. Definitely, the last year and early this year, we have seen some newcomers at market, like, you know, companies who've been purchasing mostly the fuel assemblies before as in the finished good. Like in the last year and early this year, we have seen some of the customers who've haven't been at an open market of neither conversion nor uranium before, they start to look for the market. They start to look for services and for uranium at an open market now. I hope it answered your question.
Thank you.
Thank you. The next question is coming from Chintan Khamar from Credit Suisse. Chintan, please go ahead.
Thanks for taking my question. I noticed in the Q4 consolidated financial statements that you placed a commercial bond for $50 million, which was repaid in January this year. I guess in the context of a pretty healthy cash position, is there any portion of your cash that might be restricted or we should consider, you know, inaccessible in the short term?
Hi there, Director speaking. Yes, sir. Addressing your questions here, you're right. We did actually draw $50 million commercial bonds in late December. This is only done in order to, you know, cover up for short-term cash shortages. That's it. None of our cash is actually restricted.
The next question coming from Grace Symes from Energy Intelligence. Grace, please go ahead.
Hi. My first question is about the proposed sulfuric acid plant and if you can give any more detail on that in terms of timeline or cost, or any detail really. Then, my second question would just be on these proposed China and Turkey transport routes. Do you know if these would be a lot more expensive or take longer than the route through St. Petersburg or what the comparison would be there?
Let's start from the first part of your question, that approximate timeline of a sulfuric acid plant. As of now, the sulfuric acid plant is on the stage of technical and economic evaluation. When the stage will be completed, we'll phase into another stage of preparing the documentations pertaining to the construction of the sulfuric acid plant. Approximately in 2025, the end of 2025, the sulfuric acid plant, if no significant supply chain challenges will happen, approximately at this time, we expect that the plant will be commissioned, and in 2026 it will go into the full production capacity. The financing of that project, most probably be that we will engage in the financing with a commercial party.
At this point, the exact structure cannot be disclosed. I'm sorry, I didn't get the second part of your question.
Yes. The second part was just in terms of these China and Turkey transport routes, do you know if these would be much more expensive or take a lot longer than shipping through St. Petersburg?
Yeah. Hi, Grace, it's Sijin. Thank you for your question. Answering to your question, if transits through China or Turkey will take longer or would cost more, it's hard to believe now because we're still discussing these options. Speaking about the logistics-wise, if you go through Turkey, we'll access the Mediterranean Sea right directly. We'll be using a vessel from the Mediterranean Sea rather than from Black Sea, which should take less time for us.
Again, we're still working with our partners on that, and it's too early to discuss now if it would be more or less efficient in terms of price.
All right. Thank you.
Thank you. That concludes the question and answer session from the English audio line. I will now pass the call back to Mr. Magzumov to take questions from the webcast participants. Please go ahead.
Thank you, operator. We have several questions that were sent in the webcast participants, I'll act as a moderator for this part of today's call and the following Q&A in Russian line. The first written question from the English webcast participant is going from a private investor. Can we have any indication regarding the possible amount or range of the dividend? Thank you. I can answer this question only partially. We can say that the notification for the annual general meeting will be sent in April, it will contain information that you are interested in. Second question coming from private investor. Is it possible to give any guidance for the sensitivity of the forward order book to changes in the U3O8 price?
That is to say, how will CAP's realized price change for the range of U3O8 spot prices? In our operating and financial review report, we do have a sensitivity table as well as in our presentation conference call slides, and you can see sensitivity table there. Annual average spot prices will be on the left side, and our consolidated average realized prices will be on the right-hand side. Listen, the next question comes from the private investor, Malik. Your all-in sustaining cash cost is expected to be up more than 60% in 2023 versus 2021. How much of this increase do you think relates to Russian-Ukrainian conflict, and which could be reversed if a resolution comes to the conflict?
In other words, is yours dollars per pound, is $20 per pound now a new normal or could it be reduced meaningfully from a peaceful resolution?
Actually, we would like to say that the All-in sustainable cost, does include itself all, our cash costs, also the CapEx costs. As it was disclosed in our report review that the CapEx for the next year does include the additional, CapEx capital expenditures for our development and also expansion of the subsoil use.
Contracts.
Contracts. Also, we would like to say that All-in Sustaining cash cost is we are not planning to keep it at the same level. It is much more higher due to these several investing activities. Also, we would like to say that All-in Sustaining cash cost is much more higher, not only related with the Russian and Ukrainian conflicts.
Thank you, Mr. Hassanov. The next question comes from a retail investor, Thomas. How management make comment latest weakness of the Kazatomprom share price? I can answer that question myself. The latest weakness of the Kazatomprom share price is most, as we see, for ourselves, is related to the market fluctuations and uncertainty on both capital markets and uncertainty that investors feel in the region. The next question from the same investor: Are there any information you can chat about ANU Energy? Has any contract been signed with that new company? How Kazatomprom will benefit from operations with ANU Energy?
Thank you for the question. Speaking about the energy, I need to mention that in that front, we act in two roles. The first one is being one of the cornerstone investors among with the other companies, and then secondly is being a supplier of uranium for that front. Speaking about the development of the company and with their progress of signing the country, new contracts of the progress of their to attract the new investments, we can ask you to contact the manager of the fund company called Agraga. We can additionally provide the details of their website and contact information if it would be required. I hope it answers the question.
Thank you, Sajan. The next question comes from Richard Windsor. The question is: The management turnover has been higher than expected over the last 18 months. Please, can you explain why turnover has been so high, and what confidence can we have that the management will be stable from now on?
Please, Sam.
I can answer that question, and our team members may join as well. As for the management turnover, as it was said in the conference call, during the conference call, this management turnover has been due to personal reasons for the CEO, for our previous CEO. Our previous CFO decided to stay on her parental leave and not to return and be with her family. As for Mr. Askar Batyrbayev, he has chosen to pursue other opportunities. Our new upcoming chief officers are now part of our team and we do not really comment on any new upcoming changes. As of now, we feel confident that our management team is more than able to deliver on our guidance. I hope that answers your question.
The next question comes from, private investor. Can you please provide an update on your ANU Physical Uranium Fund ?
Thanks for the question. As I mentioned, we act on it roles. The first one is being the one of the cornerstone investors of that fund, and secondly being the supplier of uranium for the fund. We do have the right of the first refusal if they'll find the money for the getting the uranium, if they'll attract a new investment to purchase uranium. The developments and further improvement of the fund are being managed by the company called Agraga. We can provide the details for that company. It can provide the contact information, and they would be able to answer to the question on the progress of the additional investments to the ANU Energy Physical Uranium Fund. Thank you.
Thank you, Sajan. The last question comes from Sinara Bank, Mr. Kirill Pechennikov. Please comment on the spike in profitability in Q4, 2022. Based on your financial statements, adjusted EBITDA margin is close to 100% in second half of 2022. What's the reason? Is it just KATCO recognition? What was adjusted EBITDA in Q4, 2022? I think I can answer that question myself. In the operating and financial results that we provide, we provide our half year results and full year results. Using reverse engineering, you can reverse engineer the amount of second and third and fourth quarter adjusted EBITDA. Unfortunately, we do not provide any quarterly results in our operating and financial review, only the financial statements.
The methodology for EBITDA and adjusted EBITDA are in our operating and financial review. You can reverse engineer that. As for JV Katco recognition, we can say that 11% additional will be recognized starting from 2022 and ongoing. I hope that answers your question. This concludes the question and answer session in English. The English line will now be disconnected, and we will start our Russian Q&A in about 10 minutes. We ask the participants on the Russian line to stay connected as we might resume the Q&A session sooner than 10 minutes. I will turn the conference back to Mr. Mukanov to close the English session.
Okay. ladies and gentlemen, thank you for participants to this meeting. Again, we're very glad to present you our financial results of Kazatomprom for the last year guidance. Again, thank you for your attention. Have a nice day.