Wednesday, 16 August 2006
British Energy has reported a huge rise in quarterly profits, but its shares have dipped on concerns that it might miss its output goal this year.
The nuclear power generator saw first quarter profits rise 85% to Tú210m after supply shortages forced up electricity prices earlier this year.
But the firm said it was worried about lost output from unplanned stoppages.
As a result, its aim for annual output of 63 terawatt (TWh) hours now looked "very challenging", it said.
Losses from unplanned stoppages rose to 3.4 TWh in the quarter from 2.3 TWh for the same period last year.
This amounted to 20% of total generation output over the period.
British Energy shares were down 45 pence, or 6%, at 706.5p in lunchtime trade.
Price boost
The firm pledged to focus on improving reliability at its plants, which include eight nuclear stations in the UK.
The company was financially restructured in 2004 after facing collapse, and relisted on the stock market in 2005.
Soaring demand for electricity over the winter and spring boosted the firm, with achieved prices rising Tú11.20 per megawatt hour to Tú35.90.
In the three months to the end of June, the firm's revenues rose to Tú729m from Tú521m for the same period last year.
'Unpredictable'
"I am pleased with our financial results benefiting from strong electricity prices," said chief executive Bill Coley.
"However, I am not pleased with the level of unplanned losses. We are sharply focused on improving losses over the remainder of the year."
One analyst said the profit increase was impressive but that this had much to do with the rise in wholesale prices.
"What the results do remind investors of is the unpredictable operational nature of nuclear power, unpredictability which sits uneasily with equity investors particularly in the utility sector," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers.
16 August 2006, BBC News
