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Tuesday, 19 March, 2002, 17:44 GMT
UK power group's profits jump
Electricity pylons
Electricity prices set to remain weak in the near term
UK-based electricity group International Power has unveiled strong growth in profits, shrugging off turbulence in its US markets.

The company on Tuesday said profits before one-off costs for 2001 jumped by 48% on the year to 326m ( $456m), in line with analysts' expectations.

The company, which split from UK power generator National Power in November 1999, said the higher profits came despite a year of 'turmoil' in its US markets.

The US energy markets, which accounted for about a quarter of International Power's sales last year, were hit by the Enron bankruptcy and the California energy crisis during 2001.

Acquisitions sought

International Power is currently on the lookout for potential acquisitions, and may bid for power plants put up for sale by Enron.

"Because of the market position there will be a lot of assets for sale and we will look for the right opportunity to buy," chief executive Peter Geller said.

The company is also keen to expand its presence in the Middle East, he added.

Any acquisitions would probably be funded by extra borrowing on the back of the company's sound finances, rather than a new share issue, the company said.

Costs under control

The company attributed its improved performance last year in part to higher electricity prices in Australia and stronger earnings from certain subsidiary firms.

An austerity drive which slashed corporate costs by 35% to 28m also helped to boost the bottom line.

International Power added that wholesale electricity prices are likely to remain weak in the near term due to mild winter weather and continuing economic uncertainty.

But it said market conditions "should improve" as the economy picks up later in the year.

In the City, International Power was the strongest performer in the Ftse, rising 7.25% to 207p.

International Power comprises the non-UK generating operations of National Power. The domestic arm of the business now trades under the name Innogy.

See also:

28 Aug 01 | Business
National Grid scoops US deal
10 Apr 01 | Business
Utilities gear up for power struggle
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