Hydro-Electric waits for rain

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LOW rainfall in the Highlands during the summer cost Hydro-Electric, the smaller of the two Scottish electricity companies, pounds 1.6m in lost profits, reining back the increase in half-year pre-tax profits to 12.3 per cent, from pounds 40.6m to pounds 45.6m, writes Terence Wilkinson.

The interim dividend has been lifted by 10 per cent to 3.96p a share, but Hydro-Electric shares fell 13.5p to 434p. Roger Young, chief executive, said rainfall had continued well below average in October and November, but unless conditions became a lot worse, the final dividend would not be affected.

The company is set for a significant sales expansion south of the border. By January 1995, about 30 per cent of its capacity will be taken up in England and Wales.

In the first half, sales in the north of Scotland rose by 3.5 per cent, but turnover in England and Wales increased by 13.4 per cent to 20 per cent of total sales.

Hydro-Electric has spent pounds 69m to increase access to markets where it is not regulated. The upgraded interconnector between England and Scotland increases the company's capacity by 25 per cent. A joint venture with British Nuclear Fuels at the Fellside station in Cumbria and a station under construction at Keadby near Scunthorpe, due to start in January 1995, will boost output further.