Press Releases
06/11/2008
International Power plc - Interim Management Statement
(London – 6 November 2008) International Power today publishes its Interim Management Statement, in respect of the period from 1 July 2008 to 6 November 2008.
Highlights- Excellent performances from First Hydro and Deeside in the UK
- Strong liquidity and no significant refinancings until 2010
- 2008 will be another year of growth
Philip Cox, CEO of International Power, said "Our business continues to benefit from our diversified portfolio. Due to tighter market conditions in the UK, First Hydro and Deeside are now expected to generate significantly improved profitability, and we are on track to deliver another year of growth."
Financial and operating update
In North America we expect spreads for 2008 to be marginally lower than our half year guidance due to milder conditions in the summer and lower natural gas prices in the second half of the year. Forward spreads in North America have reduced over recent weeks, but we believe that these do not reflect the underlying strong market fundamentals. As a result we have not significantly increased our forward contracted position for 2009.
In the UK, First Hydro and Deeside are performing very strongly, benefitting from volatile prices and increased spreads in the short-term market, driven by plant unavailability. Our decision to leave Deeside largely uncontracted enabled us to capture these increased spreads at a higher load factor.
Rugeley returned to service on schedule in late September and early October. The FGD installation is anticipated to be completed in the first quarter of 2009, and accordingly we have purchased sufficient low sulphur coal to ensure generation levels are maintained.
The 2009 forward contracted position at Rugeley and Saltend has not changed significantly since our interim results in August 2008, and Deeside is relatively lightly contracted into 2009 to maintain access to the short-term market.
Following the fire at ISAB in Italy, we expect one unit to return to service before the end of the year and the second unit is unlikely to return to service before the end of 2009. This is not expected to have an earnings impact in 2009, as we anticipate that the extended outage will be covered by business interruption insurance. Our other contracted assets in Europe continue to perform in line with expectations.
Our assets in the Middle East continue to perform well, with the region benefitting from increased capacity at Ras Laffan B and Umm Al Nar.
Australia continues to perform in line with expectations. For 2009 we have forward contracted 75% of our expected merchant output at Hazelwood.
In Pakistan, our plants are receiving payments for current output and have continued to receive interest on overdue amounts. As a result, the overdue receivable has not increased since September and we are confident that the issue will be resolved satisfactorily given the initiatives underway to improve the Water and Power Development Authority's liquidity.
Our remaining PPA plants in Indonesia and Thailand continue to deliver good operational and financial performance and have maintained strong payment records.
We continue to pursue growth opportunities in all our regions and our greenfield developments are progressing. In addition, we have expanded our European Wind Portfolio by 48MW, of which 18MW is now in operation and 30MW is under construction.
Financial Position
International Power's financial position remains strong, with good liquidity, strong free cash flow generation, and committed corporate bank facilities of US$850 million. International Power has completed all major refinancings for 2008 and has only a £60 million (International Power's share) refinancing for the SEAGAS pipeline due in 2009.
As a result of the satisfactory resolution of a number of outstanding tax matters, we now expect the effective tax rate in the current year to be approximately 22%.
Outlook:
The fundamentals of our business remain strong. Our portfolio is performing well with First Hydro and Deeside delivering ahead of expectations, which will significantly offset the impact of the outages at Rugeley, Hazelwood and ISAB. We expect 2008 to be another year of growth.
International Power will report financial results for the year ending 31 December 2008 on 11 March 2009.
For further information please contact
| Investor Contact: Aarti Singhal +44 (0)20 7320 8681 |
Media Contact: Beth Akers +44 (0)20 7320 8622 |
About International Power
International Power plc is a leading independent electricity generating company with 33,209MW gross (21,340MW net) in operation and 2,862MW gross (840MW net) under construction. International Power has power plants in operation or under construction in Australia, the United States of America, the United Kingdom, the Czech Republic, France, Germany, Italy, the Netherlands, Portugal, Spain, Turkey, Bahrain, Oman, Qatar, Saudi Arabia, the UAE, Indonesia, Pakistan, Puerto Rico and Thailand. International Power is listed on the London Stock Exchange with ticker symbol IPR. Company website: www.ipplc.com.
