International Power hit by weak UK market

INTERNATIONAL Power, owner of Rugeley Power Station, has been hit by weak market conditions in the UK but boosted by its operations in the emerging markets, especially Latin America.

In a trading update for the period to October 25, 2011, the group said of its UK operation: “As expected, overall performance for the period was down, reflecting the roll-off of higher priced contracts and weak market conditions in the UK.

“The retail business has performed well with a higher volume of gas sales and improved pricing for gas and electricity. Our flexible portfolio remains well positioned to capture value from any increase in market volatility.”

The update, which includes figures from both International Power and GDF SUEZ Energy International, showed revenue for the nine months ended September 30, 2011 was £10.75bn  (€12.344bn).

It said its enlarged portfolio had continued to perform well and in line with expectations.  

“We continue to make good progress on integration, with synergies outperforming expectations as previously disclosed. In addition to the significant capacity under construction, we continue to make progress on our strong pipeline of development projects,” it said.

In 2011, the group said it would invest approximately £2.26bn (€2.6bn) in growth capital expenditure. This is consistent with its expected capital expenditure of some £2.6bn (€3bn) to £3.48bn (€4bn) per annum over the medium term, including annual maintenance capital expenditure of approximately £479m (€550m).
 
It said it remained committed to maintaining its investment grade credit rating and has the financial flexibility to invest in further growth opportunities.

Looking ahead, it said its outlook remained unchanged from that given in the Interim results, which stated: “We continue to expect growth in 2011 with performance in the second half anticipated to be similar to the first half, despite the current economic backdrop.

“Overall our construction programme is progressing well and is on plan to deliver the anticipated EBITDA growth in 2013.

“We are confident of delivering sustained growth in shareholder value from our significant pipeline of development projects in emerging markets, coupled with our strong competitive position and future recovery in merchant markets.”