International Power (IPRPY.PK), the FTSE 100 electricity generation group, said today that trading in the first four months of 2011 had been in line with expectations and that it was on course to grow this year. In February, the group completed a tie-up with French multi-national GDF Suez in which the two sides combined their Energy International Business Areas outside Europe and certain assets in the UK and Turkey. Reporting on the pro forma performance of the combined business, International Power said that revenues in the quarter ended 31 March 2011 were up 9% to €4,046 million compared to the equivalent pro forma in 2010. The International Power share price responded with a 2.3p gain to 322.4p.
International Power currently has electricity generating assets of around 70,196MW gross (41,550MW net) in operation and 17,249MW (gross) (6,826MW net) under construction. In Latin America the group has a portfolio of assets in Brazil, Chile, Peru, Argentina, Panama and Costa Rica. In Brazil, it owns 68.7% of Tractebel Energia, which is the largest independent power producer in the country representing approximately 6% of the total installed power generation capacity. During the first four months, the group benefited from a higher average sale price driven by the start of new contracts, the positive impact of inflation escalation on contract pricing and favourable foreign currency movements. Operations in Chile benefited from a contribution from the GNLM gas terminal which commenced operation in April last year, and in Panama the 100MW BLM plant returned to service in March following a major outage in 2010.
Elsewhere, the performance in North America was flat on the same period last year with merchant markets remaining challenging. In the U.K. and Europe region, first quarter revenues were up on last year but an expected "roll-off" of higher priced contracts means the performance in the current year is below 2010. As a result of weaker market conditions, the group has temporarily reduced the declared capacity of its Teesside CCGT from 1,875MW to 45MW although the plant retains flexibility to capture upside from any market recovery.
In the Middle East, Turkey and Africa revenues increased in the first quarter reflecting the contribution from new units in the Middle East and higher sales volumes at Izgaz in Turkey. Meanwhile higher revenue in Asia was supported by the strengthening of the Singapore dollar and Thai baht, together with improved pricing on sales to industrial customers in Singapore. Finally, pro forma revenue in Australia was largely unchanged when compared to the first quarter of 2010. Here, power prices were softer due to a sustained period of mild weather but this was partially offset by the strengthening of the Australian dollar.
Looking ahead, International Power said it expected to have more than 2GW (net) of new capacity in operation by the end of 2011. Major new projects scheduled for commissioning in 2011 include Estreito in Brazil, Astoria 2 in North America, Shuweihat 2 in Abu Dhabi, Al Dur in Bahrain, Ras Laffan C in Qatar and Phase 5 (Glow) in Thailand. As planned, and as part of the GDF integration plan, the company has cancelled a US$780 million corporate revolver facility and repaid a US$395 million Portfolio Financing for the International Power Mitsui assets. Elsewhere, US$807 million of debt at Coleto Creek and US$319 million of debt at the IPA Central portfolio were also repaid during the same period.