International Power pays first dividend

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The Independent Online

International Power celebrated its return to the FTSE 100 index yesterday by paying its first dividend since the company was demerged from National Power five years ago.

International Power celebrated its return to the FTSE 100 index yesterday by paying its first dividend since the company was demerged from National Power five years ago.

The group, one of the UK's biggest electricity producers with 15,000 megawatts of capacity around the world, will pay a final dividend of 2.5p to shareholders in July - equivalent to 30 per cent of post- tax profits.

International Power expects to maintain a similar payout ratio this year and then move progressively towards a ratio of 40 per cent in the medium term. The size of the dividend this year will be bigger because the company expects to achieve earnings per share of between 11p and 12.5p compared with 8.3p in 2004.

Most of the growth in earnings will come from Edison Mission Energy, the US power producer which International Power and Mitsui of Japan bought for $1.9bn (£990m) last December.

Phil Cox, International Power's chief executive, cautioned that the group would have to wait until 2007-09 to see a recovery in its US markets of Texas and New England, where overcapacity has hit power prices. A loss of £13m in North America last year reduced group profits by 9 per cent but they still came in slightly above analysts' expectations.

Mr Cox added that there had been some "encouraging" steps in recent weeks, with more than 13,000 megawatts of capacity being mothballed or permanently retired in Texas.

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