Fuel services
(includes results for UF6, UO2 and fuel fabrication)
| Highlights | 2011 | 2010 | change |
|---|---|---|---|
| Production volume (million kgU) | 14.7 | 15.4 | (5)% |
| Sales volume (million kgU) | 18.3 | 17.0 | 8% |
| Realized price ($Cdn/kgU) | 16.71 | 16.86 | (1)% |
| Average unit cost of sales ($Cdn/kgU) (including D&A) | 13.75 | 13.05 | 5% |
| Revenue ($ millions) | 305 | 287 | 6% |
| Gross profit ($ millions) | 54 | 65 | (17)% |
| Gross profit (%) | 18 | 23 | (22)% |
Total revenue increased by 6% due to an 8% increase in sales volumes.
The total cost of sales (including D&A) increased by 13% ($251 million compared to $222 million in 2010) due to the increase in sales volumes. The average unit cost of sales was 5% higher due to higher unit costs for UF6 relating to lower production.
The net effect was a $11 million decrease in gross profit.
Outlook for 2012
Due to current unfavourable market conditions for UF6 conversion, we are decreasing our production in 2012. We plan to produce between 13 million and 14 million kgU, and expect sales volumes in 2012 to be 10% to 15% lower than in 2011.
We are changing our fuel services product mix in 2012, producing and selling less UF6 than in 2011. We will also realize fewer 2012 cost recoveries in UF6 conversion. Therefore, in fuel services we expect:
- the average realized price for our fuel services products to increase by 0% to 5%
- revenue to decrease by 10% to 15%
- average unit cost of sales (including D&A) to increase by 10% to 15%