British Energy profits up fivefold

17-08-2006

British Energy saw its first quarter profits grow by 145 per cent in just three months of trading, it has announced.

During the three months to July 2nd this year, net profit shot up to £238 million, a massive increase in the £74 million realised by the firm during the same quarter last year.

Largely responsible for the increase has been the sharp rises in utility prices caused by instability in the global market, a factor Bill Coley, British Energy's chief executive, has acknowledged.

"I am pleased with our financial results benefiting from strong electricity prices and continuing improvement in many of our key operating metrics," Mr Coley said.

"However, I am not pleased with the level of unplanned losses. We are sharply focused on improving losses over the remainder of the year, and continue to work towards our long term objective of world class operational performance."

Losses grew roughly proportionately to the profit increase, mainly caused by unplanned power outages, "refueling overruns" and, to a smaller extent, planned boiler closure unit inspections.

These problems have, however, been dwarfed by the vast increases in profits the once beleaguered company has registered in its first three months.

In 2002, the privatised company approached the government for help, who responded two years later by investing £3 billion in the company.

A Commons select committee report published in February warned that the government's substantive stake in the company remained a major risk to taxpayers' money despite considerable progress already made before today's results.

Now that British Energy is on track for total year profits of over £1 billion, it is likely a future update of that report will adopt a more optimistic tone.


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