JSC National Atomic Company “Kazatomprom” (“Kazatomprom”, “KAP” or “the Company”) announces its consolidated financial results for the year ended 31 December, 2018, prepared in accordance with International Financial Reporting Standards (IFRS).

“2018 was an important year for Kazatomprom, characterized by significant strategic and financial progress, culminating in our successful IPO in November,” said Galymzhan Pirmatov, Kazatomprom’s Chief Executive Officer. “We have seen a steady improvement in all of our key financial metrics. The annual financial results are in line with expectations, demonstrating the Company’s ability to generate solid returns amid difficult market conditions. Of particular note is the transformation of our marketing function and the related increased revenue and new customers it has helped attract in 2018.

Kazatomprom continues to be the world’s leading uranium producer, with the largest reserves in the lowest quartile for operating costs. We will maintain a disciplined approach given the current market environment, and we remain fully committed to our strategy of prioritizing value over volume with a reduced production level at all of our operations.

Remaining consistent with our strategy and being transparent is key to achieving our vision to be the partner of choice in the global nuclear fuel industry, and an attractive investment opportunity for those seeking exposure to the strong fundamentals of the uranium market.”

Key Financial Metrics

¹ In 2017 the Group recognised a gain from the exercise of a put option of KZT 107.7 billion because of the difference between the consideration received and the carrying amount of the investments.

² Adjusted EBITDA is calculated by excluding from EBITDA all items not related to the main business and having a one-time effect.

³ Adjusted Attributable EBITDA is calculated as an adjusted EBITDA less the share of the results in the net profit in JVs and Associates plus the share of adjusted EBITDA of JVs and Associates engaged in the uranium segment (except Budenovskoye JV LLP’s EBITDA due to minor effect it has during each reporting period) less non-controlling share of adjusted EBITDA of Appak LLP and Inkai JV LLP less any changes in the unrealized gain in the Group.

Operating and Financial Review and Financial Statements

The Operating and Financial Review and Consolidated Financial Statements provide detailed explanations of Kazatomprom’s results for the 12 months ended 31 December 2018, as compared to the same period in 2017, with guidance for 2019. This press release should be read alongside these documents, all of which are available at www.kazatomprom.kz.

Business Combination Changes to Note

The 2018 annual results of the Group were significantly affected by transactions related to changes in the Group structure, as outlined in the 2018 Operating and Financial Review. In particular, net profit in 2018 was significantly impacted by gains of:

• KZT 95,929 million related to JV “Inkai” LLP, following the Group’s acquisition of a controlling interest in that entity
• KZT 124,632 million and KZT 92,951 million respectively, arising from contractual agreements entered into with Uranium One Inc. for “Karatau” LLP and JV “Akbastau” JSC during the year, which resulted in these entities being reclassified as joint operations of the Group (previously associated entities)

As shown in the table above, an adjusted net profit line is provided to better compare 2018 to 2017.

Revenue, Net Profit, EBITDA

Consolidated revenues were KZT 436.6 billion in 2018, an increase of 58% compared to 2017, mainly due to an increase in sales of uranium products reflecting market share growth and the change in the Group structure.

The operating profit in 2018 was KZT 77.5 billion, an increase of 138% compared to 2017, which was mainly due to the increase of U₃O₈ sales volumes, appreciation of USD against KZT, and higher average sales price.

Net profit for the year was KZT 380.3 billion, an increase of 173% compared to 2017. However, a significant portion of the year-over-year increase is associated with one-time effects of transactions in both years, especially the exercise of the put option in 2017 and the change in investment value resulting from the inclusion of JV “Inkai” LLP, “Karatau” LLP, JV “Akbastau” JSC in the consolidation. The one-time effects of these transactions increased net income by KZT 107.7 billion and KZT 313.5 billion in 2017 and 2018 respectively. Adjusting for those effects, adjusted net profit was KZT 66.8 billion, an increase of 112% compared to 2017.

Adjusted EBITDA totaled KZT 131.3 billion in 2018, an increase of 36% compared to 2017, while Adjusted Attributable EBITDA was KZT 140.2 billion in 2018, an increase of 9% compared to 2017. The increases were mainly driven by increased operating profit and the change in the Group structure.

For a similar reason, operating cash flows totaled KZT 58.3 billion, an increase of 149% compared to 2017.

Cost of sales

Cost of sales totaled KZT 313,817 million in 2018, an increase of 49% compared to 2017. The cost of goods sold increase is mainly due to higher uranium sales volumes in 2018 and the change in the Group structure.

Selling Expenses

Selling expenses totaled to KZT 10,530 million in 2018, an increase of 144% compared to 2017, mainly due to an increase of the costs of loading, transporting and storing (associated with higher uranium sales volumes) and the change in the Group structure.

General and Administrative Expenses (G&A)

G&A expenses were primarily influenced by the change in the Group structure, including wages and salaries (KZT 17,809 million in 2018, 8% higher than 2017), rent expenses (1,166 million, 7% higher than 2017), and depreciation and amortisation (KZT 808 million, 16% higher than 2017).

The cost of consulting and information services was KZT 4,488 million in 2018, an increase of 42% compared to 2017, largely due to an increase in services purchased by the Company during 2018.

Other expenses totaled KZT 10,534 million in 2018, an increase of 21% compared to 2017. The increase was largely related to expenses on the construction of social facilities in the newly formed Turkestani region.

Debt Leverage Ratios

The following table summarises the key ratios used by the Company’s management to measure its financial stability as at 31 December 2017 and 2018:

The above indicators reflect a stable financial position. They indicate the creditworthiness of the Company, achieved through the generation of adequate financial resources and capital, and moderate debt.

Production metrics

¹ - Production volume (100% basis): Amounts represent the entirety of production of an entity in which the Company has an interest; it therefore disregards the fact that some portion of that production may be attributable to the Group’s joint venture partners or other third party shareholders. Actual drummed production volumes remain subject to converter adjustments and adjustments for in-process material.

^{2 -} Production volume (attributable basis): Amounts represent the portion of production of an entity in which the Company has an interest, which corresponds only to the size of such interest; it therefore excludes the remaining portion attributable to the joint venture partners or other third party shareholders. Actual drummed production volumes remain subject to converter adjustments and adjustments for in-process material.

³ - Excludes liquidation funds and closure costs.

In 2018, Kazatomprom successfully reduced annual mined uranium volumes against planned levels. Production volumes of U₃O₈ on a 100% basis decreased overall by 7% at all uranium mining entities year on year. Production was reduced in accordance with the Company’s decision that saw production at all operations reduced by 20% against Subsoil use contract volumes. Attributable production volumes were lower for the same reason.

Attributable Cash Cost (C1) and All-In-Sustaining Costs (AISC) decreased by 4% and 6% respectively in 2018, compared to 2017. The decreases were primarily due to depreciation of KZT. It should be noted that despite of the 7% decrease in production volumes, the cost of production per unit in KZT changed insignificantly due to cost optimization efforts to further position the Group’s U₃O₈ unit production costs among the lowest in the industry.

Consolidated Group inventory of finished U₃O₈ products at 31 December 2018 amounted to 7,892 tU, which is 13% lower than at the end of 2017. At the HQ/THK level, inventory of finished U₃O₈ products was 7,353 tU, a decrease of 18% compared to 2017. The lower inventory levels are the result of an increase in sales volumes in 2018, as well as the Company’s target to maintain an optimum inventory level of approximately six months of annual attributable production.

Investment costs of mining companies (on 100% basis) totaled KZT 75.4 billion, a decrease of 7% compared to 2017, mainly due to the decrease of sustaining capital costs substantiated by the cost optimization program.

Sales metrics

In 2019, Kazatomprom expects to remain consistent with its previously announced intention to flex down planned production volumes by 20% for 2018 through 2020 (versus consolidated planned production levels under subsoil use licenses, which were increasing annually over that period). With the flex down, under the existing subsoil use licenses, production is expected to total approximately 22,750 to 22,800 tU (100% basis) in 2019; without the reduction, production would have exceeded 28,500 tU (100% basis) in 2019.

Kazatomprom expects to continue following a market-centric approach to uranium production, rather than the previous production-focused strategy. By leveraging the in-situ recovery mining method, the Company can adjust production levels and respond to changes in uranium market conditions very rapidly and cost-effectively.

The guidance for sales remains consistent with Kazatomprom’s market-centric strategy. Sales in excess of planned attributable production are expected to be primarily sourced from inventories, and from KAP subsidiaries under contracts and agreements with JV partners and other third parties.

The Company expects to maintain an inventory level of approximately six months of annual attributable production at the 2019 year-end.

Conference Call

Kazatomprom has scheduled a conference call to discuss the 2018 operating and financial results on Wednesday, 6 March, 2019 at 14:00 (AST) / 08:00 (GMT). The discussion will be followed by a question and answer session with investors. The call will be hosted in both Russian and English, with immediate translation between the two languages as the call progresses.

Interested parties are invited to join the call by dialing +7 (8) 495 249 98 42 in Kazakhstan, +44 (0) 20 3003 2701 in the UK or +1 646 843 4610 in the US, all using the conference pin 8189576#. A live webcast of the conference call with a slide presentation will be available from a link at www.kazatomprom.kz home page on the day of the call. A replay will be made available after the call.

For further information, please contact:

Kazatomprom Investor Relations Inquiries

Cory Kos, Head of Investor Relations

Tel: +7 7172 45 81 69

Email: irkazatomprom.kz

Kazatomprom Public Relations and Media Inquiries

Tel: +7 7172 45 80 63

Email: prkazatomprom.kz

Giles Read (Powerscourt - London)

Tel: +44 20 7250 1446

Email: Kazatomprompowerscourt-group.com

A copy of this announcement will be made available at www.kazatomprom.kz.

About Kazatomprom

Kazatomprom is the world's largest producer of uranium, representing approximately 22% of total global uranium primary production in 2018. The Group benefits from the largest reserve base in the industry. Kazatomprom operates, through its subsidiaries, JVs and Associates, 26 deposits grouped into 13 mining assets, all of which are located in Kazakhstan and mined using ISR technology.

Kazatomprom securities are listed on London Stock Exchange and Astana International Exchange. As the national atomic company in the Republic of Kazakhstan, the Company has partnered with substantially all of the leading players in the uranium mining industry globally. The Group's primary customers are operators of nuclear generation capacity, and the principal export markets for the Group's products are China, South and Eastern Asia, Europe and North America. The Group sells uranium and uranium products under long-term contracts, short-term contracts, as well as in the spot market, directly from its headquarters or through its Switzerland-based trading subsidiary, THK.

For more information: http://www.kazatomprom.kz

Forward-looking statements

All statements other than statements of historical fact included in this communication or document are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future.  THE INFORMATION WITH RESPECT TO ANY PROJECTIONS PRESENTED HEREIN IS BASED ON A NUMBER OF ASSUMPTIONS ABOUT FUTURE EVENTS AND IS SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTY AND OTHER CONTINGENCIES, NONE OF WHICH CAN BE PREDICTED WITH ANY CERTAINTY AND SOME OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. THERE CAN BE NO ASSURANCES THAT THE PROJECTIONS WILL BE REALIZED, AND ACTUAL RESULTS MAY BE HIGHER OR LOWER THAN THOSE INDICATED. NONE OF THE COMPANY NOR ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS OR AFFILIATES, OR ANY REPRESENTATIVES OR AFFILIATES OF THE FOREGOING, ASSUMES RESPONSIBILITY FOR THE ACCURACY OF THE PROJECTIONS PRESENTED HEREIN. The information contained in this communication or document, including but not limited to forward-looking statements, applies only as of the date hereof and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to such information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company’s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date hereof.