US energy generation company Calpine has reported that its losses worsened in the first three months of the year due to increases in operation costs and expenses relating to new energy production projects.
For the three months ended March 31, 2005, Calpine, which operates 92 power plants worldwide, reported revenue of $2.2 billion, representing an increase of 9% over the same period in the prior year. However, losses increased to $168.7 million, a net loss per share of $0.38, compared to a net loss of $71.2 million, $0.17 per share, for the same quarter in the prior year.
The company’s average power capacity generation increased by 21% to 26,368 megawatts compared to 21.1 million megawatt-hours for the first quarter of 2004. However, income was negatively affected by an increase in generation costs from $20.65 per megawatt-hour in 2004 to $24.10 per megawatt-hour for the last quarter.
Calpine’s income was also negatively affected by a $100.5 million increase in interest expenses compared to 2004.
The poor results reflect the difficult business environment that power generation companies are currently facing in the US market. Increased production costs have reduced margins, while sales growth has been held back by high competition and overproduction. On the announcement of widening losses Calpine faces renewed speculation about the possibility of bankruptcy.