Financial Times

December 08, 2000

Innogy, the integrated power group that split from National Power at the start of October, said yesterday it could float its electricity storage business in the first half of 2002.

The news came as Innogy and International Power, the independent electricity producer left behind by the demerger, published their first separate set of interim results.

Ross Sayers, Innogy chief executive, said the group was looking to maximise shareholder value from its Regenesys technology, which could potentially revolutionise electricity trading by allowing large quantities to be stored as electro-chemical potential.

One of the options being considered was a separate listing for Regenesys, which is already operated as a stand-alone business, once the group had demonstrated that it worked under commercial conditions.

Innogy has signed its first overseas Regenesys contract to supply a 15MW power storage system to the Tennessee Valley Authority in the U.S..

It is also close to announcing a business partner to boost its design, manufacturing and construction capability for Regenesys storage systems.

Both Innogy and International Power unveiled better than expected first-half results, but because of the demerger neither could provide last year’s comparatives at the pre-tax level.

Innogy’s profit before interest, tax and exceptionals rose £18m ($26m) to £120m in the six months to September 30, while International Power’s pre-exceptional PBIT rose 24 per cent to £110m in the same period.

Fraser McLaren, analyst at ING Charterhouse, said: “These are an encouraging set of first-half results although the demerger does make the figures slightly obscure.”

Innogy booked one-off charges totalling £233m covering the cost of buying its way out of a power purchase agreement in northern England, the closure of the Blyth power plant and demerger costs.

International Power’s exceptionals totalled £99m, of which £74m related to the demerger and £25m to the cost of withdrawing from China.

Peter Giller, chief executive of International Power, said he was pleased at the underlying progress made since the split. The group had recently agreed memorandum of understanding to resolve a long-standing payment dispute with Pakistan’s Water and Power Development Authority and was continuing to review the future of its non-core assets.

International Power does not intend to pay a dividend for the foreseeable future as part of a strategy to retain earnings to fund growth.

Innogy will pay a first interim dividend of 2.5p in line with its aim of paying 7.5p for the full year.

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