Press Releases
03/11/2005
International Power plc Financial Results for the Nine Months ended 30 September 2005
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(London – 3 November 2005) International Power today announces its results for the nine-month period ended 30 September 2005 and reports on key developments to date.
Sir Neville Simms, Chairman of International Power, said, “I am pleased to report a good financial performance that is underpinned by a strong contribution from our recent acquisitions, and an improved performance in two of our key merchant markets – the UK and the US. The portfolio continues to perform well and we remain on track to deliver full year earnings in line with our guidance of 12p - 13p.”
Nine Month Highlights- Profit from operations* (excluding exceptional items) of £345 million (2004: £162 million)
- Profit before tax (excluding exceptional items) of £200 million (2004: £103 million)
- EPS (excluding exceptional items) of 9.6p (2004: 6.5p)
- Free cash flow of £185 million (2004: £69 million)
Profit from operations* |
Nine months ended 30 September |
Year ended 31 December |
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| 2005 | 2004 | 2004 | |
| £m | £m | £m | |
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| North America | 28 | (6) | (21) |
| Europe | 145 | 55 | 97 |
| Middle East | 18 | 16 | 20 |
| Australia | 105 | 78 | 98 |
| Asia | 79 | 41 | 60 |
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| Regional total | 375 | 184 | 254 |
| Corporate costs | (30) | (22) | (32) |
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| Profit from operations | 345 | 162 | 222 |
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*Profit from operations comprises the sum of profit before interest and tax (PBIT) of subsidiaries and profit after tax (PAT) of joint ventures and associates. Comparatives for 2004 have been presented on this basis.
North America
Profit from operations in North America amounted to £28 million compared to a loss from operations of £6 million in 2004. This increase was primarily driven by improved profitability at our Texas plants (Midlothian and Hays), together with a first time contribution from EcoEléctrica, which was acquired in December 2004. Hartwell and Oyster Creek, which are both fully contracted, continued to perform well.
In Texas, power prices have increased, reflecting a tightening reserve margin and high gas prices which benefited our fuel efficient plants. This has significantly increased profitability when compared to last year. In New England, overall financial performance was largely unchanged. Q1 2004 benefited from some very high, short duration, price spikes which lifted the nine-month performance last year. Excluding this, underlying profits in New England are ahead of 2004.
Europe
In Europe, profit from operations in the period rose significantly to £145 million (2004: £55 million) reflecting an excellent contribution from our newly acquired assets (particularly First Hydro, Turbogás and ISAB) and a strong performance from Rugeley in the UK.
Profitability at Deeside showed some improvement, but margins for gas fired generation are not as favourable as for coal fired generation that has benefited from a relatively stable fuel cost. Our 1,200 MW Saltend plant, which was acquired in partnership with Mitsui & Co. Ltd in July this year, has been successfully integrated into our UK portfolio. Saltend, which has a long-term gas contract, is performing well and is delivering strong cash flow in line with expectations.
All other European assets performed well and delivered a good performance.
The TXU settlement at Rugeley now amounts to £67 million, and a final receipt of between £6 million and £17 million is expected in 2006.
As reported on 19 October 2005, together with Mitsui & Co. Ltd, International Power has submitted an indicative bid to acquire an interest in the 4,000 MW Drax power plant in the UK. Further announcements will be made as appropriate.
Middle East
In the Middle East, profit from operations increased to £18 million (2004: £16 million), reflecting a contribution from Shuweihat which commenced operation in October 2004.
The construction of Ras Laffan B in Qatar is now well underway and the construction of the four Tihama Power plants in Saudi Arabia is on track.
Australia
Profit from operations in Australia increased to £105 million (2004: £78 million), primarily reflecting contributions from our recent acquisitions, namely Loy Yang B and Kwinana, together with a contribution from our Canunda wind farm. At Hazelwood and Pelican Point profits are down year on year, but 2005 contracted prices remain at a premium to the underlying market.
The integration of the EnergyAustralia retail business continues to progress well.
Asia
In Asia profit from operations almost doubled at £79 million (2004: £41 million). This increase is primarily attributable to profits from Paiton in Indonesia, together with a good performance at KAPCO, Uch and Thai National Power. All long-term contracted assets continued to operate with high operational standards and high levels of availability, delivering good financial performance.
