International Power improves despite power price fears

19 November 2002 – Third quarter results announced today by independent power developer International Power show operating profit up 30 per cent before exceptional items, despite weak power prices in the UK and US.

In its statement the company acknowledged uncertainty arising from potential changes to the tolling agreement at its Rugeley power plant which was originally negotiated with TXU Europe. Although payments are still being made under the contract, International Power said it had contingency plans should the plant have to operate “in a merchant environment”.

International Power reported earnings per share up 39 per cent at 12.8p with operating profit prior to interest and tax up to à‚£312m from à‚£240m last year.

Chairman, Sir Neville Simms, said, ” International Power has demonstrated again that it is a strong company with fundamentally sound business model. Not only is it financially robust enough to overcome the current challenges in the power generation industry, but the company is also extremely well positioned to deliver value enhancing growth in the future.”

North American operations showed improvement due to the addition of new capacity and a compensation payment from Alstom in respect of late commissioning and performance recovery.

In Europe the company have been forced to mothball its Deeside station due to weak wholesale prices and this resulted in operating profits falling by à‚£16m.

Improved performance from Australian and other worldwide operations contributed to the overall gains and the company left its forecasts unchanged for the year.

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