Heavy rain lifts Hydro-Electric

HIGHER electricity prices and heavy rain helped Hydro-Electric increase pre-tax profits by 34.6 per cent to pounds 125.3m last year from pro forma pounds 93m in 1990/91. The company, which supplies electricity in the north of Scotland and the islands, said that lower than expected oil prices also contributed to the strong results.

Hydro-Electric generated a quarter of its electricity from water last year, boosted by very heavy rain in the last quarter of the year. The difference between a good rain year and a bad one can affect profits to the tune of up to pounds 10m, the company said.

Roger Young, the chief executive, said that sales were helped by the relatively buoyant economy in the Grampian region and growth in the domestic central heating market. But Hydro-Electric also increased its sales into England and Wales, where it supplies industry and regional electricity companies, by 58 per cent to pounds 116.8m.

Group turnover in the year to 31 March increased by 17.3 per cent to pounds 667.4m from pounds 568.9m a year earlier. Earnings per share increased to 25.7p from 17.9p the previous year and the total recommended dividend is 10.16p, an increase of 11.3 per cent.

Hydro-Electric increased its charges for domestic and other small customers by 8.9 per cent on 1 April 1991 and by a further 4.9 per cent on 1 April this year. The company said that it was well within its regulatory target, and that it had undercharged by pounds 12m so far compared with the maximum allowed in its price control formulae.

Both Hydro-Electric and its neighbour, Scottish Power, hope to increase sales across the border with a planned pounds 100m upgrade in the interconnection to the England and Wales grid. Hydro-Electric is also hoping for a pounds 6m profit increase in the current year from the conversion of the Peterhead power station from oil to cheaper natural gas from the North Sea Miller field.