Online trading powers Enron growth

Strong growth in EnronOnline transactions has helped to lift the second quarter earnings of US energy group Enron by nearly one third. The company’s net income rose from $222m for 2Q 1999 to $289m for 2Q 2000 on a revenue increase of 75 per cent.

Transactions carried out through EnronOnline, Enron’s web-based commodities trading system, rose by 92 per cent over the same quarter in 1999. Over half of the company’s commodity trades are now handled electronically, and it expects the number of trades conducted over the web to rise by a further 90 per cent over the next two years.

Since EnronOnline was launched in 1999, more than 200 000 transactions have been completed worth $100bn. The company is using the trading unit to expand into broadband communications as well as other commodities such as metals, pulp and paper.

BNFL agrees to take back MOX fuel and compensate Japan

In the latest of a series of serious blows to its business, UK nuclear fuel specialist BNFL has agreed to take back a consignment of mixed oxide fuel which was shipped to Japan last year with falsified quality records. BNFL will also pay compensation to Kansai Electric Power Company to the tune of $60m.

It will take up to three years for the fuel to be returned to the UK, where it will be recycled, reworked or put into storage. Green groups and Pacific nations have reacted with dismay at the settlement, saying that returning the fuel poses risks to the environment.

Under the settlement, Kansai Electric Power Co. will lift its moratorium on BNFL fuel, a move which BNFL says is worth £4bn ($6bn) in current and future orders.

The MOX fuel will be brought back to the UK by one of three routes: via the Cape of Good Hope, Cape Horn or the Panama Canal. New Zealand and Fiji are among several countries that have expressed concerns over international security issues and the possible environmental ramifications of shipping the fuel.

Nuclear jv established

Siemens and Framatome have completed the transfer of their respective nuclear operations into a joint venture company known as Framatome Advanced Nuclear Power. Noting that around 20 per cent of the electricity requirements of industrial countries is supplied by nuclear generation, both the partners believe that in the long term there will be a worldwide renaissance in nuclear energy.

Framatome ANP will have an annual turnover of around $2.8bn, making it one of the world’s leading nuclear energy companies. It will go into operation this year with the aim of strengthening the competitiveness of each partner in the market for fuel elements and nuclear power station services.

Utilyx – utility buyers need help

A survey carried out by MORI on behalf of Utilyx, a UK-based e-business start-up, has revealed that over 70 per cent of utility procurement managers find it difficult to find the best tariff. Over 90 per cent said that a neutral intermediary would be beneficial.

Utilyx launched in early July 2000 with an on-line service to streamline the process by which companies manage their utility supplies. It commissioned the research to help it understand the needs of utility procurement managers faced with an enormous amount of choice and complexity.

“It’s worth noting that buyers also highlighted a number of concerns about buying utilities from more than one supplier,” said Utilyx CEO Chris Bowden. “These include the fact that it’s time consuming to deal with multiple suppliers; it’s difficult to keep in touch with the latest information; and lastly unease about billing accuracy.”

Neles alliance

Neles Automation Inc. and Endress+Hauser International have announced that they are to form an alliance for the joint development of technology and sales activities.

The two companies will sign a global sales agreement for project deliveries worldwide, and expect that the alliance will extend their scope of deliveries in the process measurement and automation markets. The new activities will employ approximately 100 people.

A new joint venture company will be set up for the sales and services of both companies’ field system solutions in Finland, and similar units may also be established in other markets. In addition, a joint technology unit will be set up for the development of new technologies and advanced field system solutions. Its focus will be to use field bus and communication technologies to integrate a wide range of products.

News digest

ABB Grows: Global technology group ABB has reported continued growth for the first half of 2000, with net income up 16 per cent and orders up six per cent. It said that the growth reflected its focus on ‘knowledge-based’ businesses, industrial IT and service. CEO Göran Lindahl said that as economies in emerging markets and Europe continue to grow, the top line should improve further in the second half of the year.

Cat beats forecast: Caterpillar has beaten analysts’ expectations in reporting after-tax profits of $262m. The company was bullish about the future of its power generation business, saying that demand in this area is extremely strong. Driven by a need for distributed power solutions, the company believes that sales of its power generation engines could triple from $1.8bn in 1999 to $6bn in 2005.

Foster Wheeler improves: Second quarter earnings at Foster Wheeler have shown an increase in line with improved conditions in the company’s primary markets. Revenues were up at $1023m for 2Q 2000 compared with revenues of $874m for the same period in 1999, while new orders booked increased 17 per cent. The Energy Equipment Group’s new orders were diversified, taking bookings for pulverized coal, circulating fluidized bed and heat recovery steam generator equipment.

GE acquires Thermodyn: GE Nuovo Pignone has closed its acquisition of Thermodyn, a French leader in the manufacturing, distribution and service of compressors and steam turbines for the energy industry.

Iberdrola reports: Spanish electricity group Iberdrola has reported a 10.6 per cent rise in net profits for the first half of 2000 to $364.2m. The company said that the growth reflected the strength of the group in the power generation sector and also recent diversification.

RWE hit: Operating profits at RWE fell 15 per cent last year to a2.71bn ($2.59) due to a sharp fall in wholesale electricity prices. The company said that its performance over the next year would continue to be hit by knock-on effects of the price cuts. It has had to renegotiate power contracts with customers and has implemented a cost-cutting scheme.

Scottish Power sells: Scottish Power has sold its contracting services division to Alstom, the energy and transport infrastructure group. The division, which was put up for sale in October 1999, was formed in 1992 following the privatization of Scotland’s electricity supply industry. It specialises in services including high voltage installations and maintenance, utility connections and facilities management.