Dark day for electricity giant

By Paul Dobson  |   2008-8-8  |     NEWSPAPER EDITION

SHARES in British energy giant International Power Plc had their biggest fall in a year in London yesterday after the company said an extended power-station shutdown will hurt second-half results.

International Power, which generates electricity in 20 countries, slid 30 pence, or 7.1 percent, to 391 pence, the steepest one-day decline since August 10 last year.

The stock traded at 400 pence in mid-morning, valuing the London-based company at 6.04 billion pounds (US$11.8 billion).

The utility owns regulated and market-based projects in Europe, the United States, Asia and Australia, to spread the risk of its portfolio.

A prolonged halt at the Rugeley plant in Britain will cost it 45 million pounds, it said yesterday in a statement. First-half earnings also missed analysts' estimates.

Chief Executive Officer Philip Cox said in a Bloomberg Television interview that one of two power-generation units at the coal-fired Rugeley plant in central England will be offline for another nine weeks because of a component failure.

He said the plant's two 500-megawatt units won't be ready to comply with rules on emissions of some poisonous gases until the end of this year or early 2009, further limiting operating hours.

International Power earlier yesterday reported first-half earnings per share excluding one-time items of 14.2 pence, below the 14.8-pence median estimate of five analysts surveyed by Bloomberg News.

An unplanned production halt at three units of its Hazelwood plant in Australia trimmed earnings.

"These one-offs are very frustrating," Cox said in the interview. "The underlying business is strongly profitable with room for optimism."