Production costs in the nine-month period increased $6.4 million, or 1 percent, compared to the same period of 2011. Production volume increased 6 percent as we purchased supplemental power from TVA in the first two quarters of 2012 that had been deferred from 2011. The unit production cost declined 5 percent in the nine-month period, reflecting the lower unit production cost under the depleted uranium enrichment program and increased production volumes in the first two quarters. The average cost per megawatt hour declined 3 percent in the nine-month period reflecting lower unit power costs.
We purchase approximately 5.5 million SWU per year under the Megatons to Megawatts program, and the purchase costs for the SWU component of LEU under the program increased $10.5 million in the nine-month period compared to the corresponding period of 2011, reflecting a 2 percent increase in the market-based unit purchase cost.
Cost of sales for the contract services segment declined $38.9 million in the three months and $117.3 million in the nine months ended September 30, 2012, compared to the corresponding periods in 2011, primarily reflecting reduced contract services work at Portsmouth in connection with the transition of Portsmouth site contract service workers to DOE’s decontamination and decommissioning contractor.
The gross profit for the third quarter was $37.5 million compared to $26.9 million in the same quarter last year. In the nine-month period, the gross profit was $88.6 million compared to $74.0 million in the same period of 2011. The gross profit margin for the third quarter was 6.6 percent compared to 7.2 percent for the same period in 2011. The gross profit margin for the nine-month period of 2012 was 5.9 percent compared to 6.1 percent in the same period of 2011. Gross profit for the LEU segment increased 28 percent in the nine-month period due to higher SWU unit gross profits and sales volumes, partially offset by lower uranium sales volumes. Gross profit for the contract services segment declined $3.7 million in the 2012 nine-month period reflecting the completion of the Portsmouth site contract service work in 2011, offset by a $1.6 million increase in gross profit for NAC.
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