BRITISH Energy announced a rise in first-half profits yesterday but the news was overshadowed by the uncertainty over the impact of problems at four of its power plants.
The Livingston-based nuclear power plant operator warned that the costs associated with the closure of four reactors at Hartlepool and Heysham 1, which represent around a quarter of its output, will be at least £50 million.
British Energy has spe
nt £20m on inspections of the plants following the discovery of corroded wiring and a further £30m buying its way out of contracts to sell power from the units.
Analysts have predicted the reactors will be closed for up to six months. However, British Energy refused to name a date when the units would be back up and running. It also warned it would pay close attention to its operating situation when deciding on how large the special third-quarter dividend would be.
Shares in British Energy fell 12.5p to 505p as analysts discussed the possibility of further output downgrades.
Dresdner Kleinwort analysts said in a note that, while the results were solid enough, the lack of news on the reactors was likely to be seen as negative. "We believe the operational risk remains underestimated, which could lead to further capital spend and/or additional output revisions."
Despite the outages at its ageing nuclear reactors, revenue in the first-half rose 2.3 per cent to £1.39 billion, propped up by high power prices, with the company almost entirely immune to the rising costs of coal and gas which hit other electricity providers.
Pre-tax profits rose 23.7 per cent to £407m in the six months to 30 September. Production fell 1.1 Terawatt on the first half of last year to 27.8TWh, with non-routine losses rising 2TWh to 8.3TWh.
The full article contains 312 words and appears in The Scotsman newspaper.
