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Tuesday, 23 May, 2000, 08:41 GMT 09:41 UK
Utilities power ahead
National Grid goes into South America
National Grid owns UK power transmission lines
The UK utility companies, Thames Water and National Grid, have powered ahead with higher profits amid plans for rapid international expansion.

National Grid's pre-tax profit was in line with market expectations, rising to 473.7m from 458.9m during the same period last year.

Profits were boosted by the company's sale of part of its stake in the telecommunications company, Energis, which generated a 1bn windfall for National Grid.

The company also laid out its strategy for expanding in foreign markets, particularly in South America, with the purchase of two South American telecom ventures. It already has interests in Brazil.

Expansion

It will take a 30% stake in Chilean telecommunications company, Telefonica Manquehue.

It will also buy a 50% stake for $61m in Southern Cone Communications Company, a new telecom joint venture in Argentina and Chile and plans to develop a broadband network across the two countries.

"These two investments build on our growing experience in start-up telecom ventures, which began with Energis in the UK and has since been transferred to Intelig in Brazil, a new project in Poland, and now Argentina and Chile," said David Jones, Group chief executive.

National Grid said it was planning further acquisitions in the United States after its takeovers last year of New England power companies Eastern Utilities Associates and New England Electric System for a total of 2.9bn.

Price cuts

As for Thames Water, the company said its pre-tax profit rose to 420m, up from 412m the previous year.

It warned that domestic price cuts would depress UK earnings this year, but said its growing international investments would offset any losses.

Thames Water said it expected to complete its purchase of New Jersey-based water utility E'Town for $948m by the autumn, marking its largest international acquisition yet.

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