US woes knock profits at International Power
Saturday 06 November 2004
International Power's quarterly profit halved, the company announced, as trading conditions in the US remained tough. It said it expected no short-term recovery in the US.
The group's North American business recorded a loss of £1m for the third quarter, compared with a profit of £13m last year. The American performance meant that group pre-tax profits, for the three months to 30 September, dropped to £22m, from £45m last time. The US accounts for 25 per cent of turnover.
"From an operating point of view, the only reason we're down is because the US is down year on year.... This is the reason why we have a portfolio approach," Philip Cox, the chief executive, said.
The company said its businesses in Europe and Australia performed well. It also said that the US result was expected and was due to low spreads - the difference between the price of fuel needed for generation and the price of the electricity produced - in Texas and New England. "We continue to anticipate recovery in both New England and Texas in the period 2007 to 2009," the company said.
International Power shares closed down 1.75p at 155.5p. The company stressed that it expected to meet the City's full-year earnings forecasts, "at the upper end of the range of 5.9p to 7.6p [a share]".
Mr Cox said he still wants to expand in the US and wants to diversify the company's fuel base, as International Power's seven US stations are all gas-fired. To reduce dependency on this region, the company in July struck a $2.2bn (£1.2bn) deal to buy 13 power generation plants. It funded the deal partly with a £291m rights issue.
Michael Gifford, a fund manager at F&C Asset Management, said: "It looked like a disappointing set of results, but investors would do well not to be too bearish on the stock as electricity and energy prices continue to rise."
- 1 If you weren't afraid of flying before last week... you probably are now
- 2 Israel-Gaza conflict: The secret report that helps Israelis to hide facts
- 3 Students offered grants if they tweet pro-Israeli propaganda
- 4 Lauren Goodger calls for tougher laws on revenge porn after sex tape leaks online
- 5 Iraq crisis: End 'very near' for Christianity after Isis takeover, says Bishop
Israel-Gaza conflict: The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£40000 - £45000 per annum: Ashdown Group: An established professional services...
£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...