The UK-based company International Power has announced strong growth in profits for 2001. Before one-off costs, profits for the year were up 48 per cent to $456 million. The jump was recorded in spite of the turmoil in the US markets following the Enron and California energy crises. The US accounted for 25 per cent of Inte-rnational Power’s business in 2001.
The company, which demerged from the UK generator National Power in November 1999, has said that it is looking for acquisitions. It is hoping to bid for power plants placed on the market in the wake of the Enron collapse. It is keen to expand in the Middle East too. Acquisitions are likely to be financed by additional borrowing, the company said, but also indicated that its balance sheet had left it with a war chest of around $1 bn.
In the USA the Enron debacle has led to the credit downgrading of companies like Calpine, NRG and AES. These companies may be forced to sell overseas operations and International Power could profit. In the UK the company is thinking of buying the Drax power plant which AES is expected to sell soon. However it is also considering mothballing half its capacity at the 500 MW Deeside power plant unless UK electricity prices strengthen.
In the USA the company is expecting to complete power plants in Massachusetts and Texas this year, bringing its US generating capacity to 4400 MW. Lower US power prices are likely to restrict portfolio additions to 1500 MW over the next few years.
