British Energy is seeking massive investment to build new reactors
British Energy has reported a 66% drop in quarterly profits, hit by falls in production from the group's ageing nuclear power stations.
The firm made profit before tax of £101m for the three months to 29 June, compared with £296m a year ago.
British Energy said it had benefited from higher power prices but output fell because of plant closures.
The firm said that "advanced discussions" in connection with a potential offer for the firm continued.
A takeover of British Energy, which is 35%-owned by the government, is viewed as the best way of supporting the UK's plans to build a new generation of nuclear plants over the next 20 years.
However, the sale process has faltered.
France's EDF had been poised to buy British Energy for £12bn but talks stalled over the price.
Centrica has also said it is talking to an unnamed third party about taking a minority stake in British Energy if that firm bought the nuclear operator. It has also said it would consider a merger with British Energy.
British Energy said boiler unit closures at Hartlepool and Heysham 1 plants had hit output and would cost more than thought to repair.
The company said the timetable for bringing the reactors back online was unchanged, but costs are now estimated to be around £115m in the 2008/09 financial year, compared with a previous estimate of £50m.
"We have continued to make good progress towards resolving the plant issues that have significantly impacted our performance in the year to date," said chief executive Bill Coley.