RNS Number:4236I
International Power PLC
07 March 2003
International Power Results Announcement
for the Full Year Ended 31 December 2002
(London - 7 March 2003) International Power announces its financial results for
the full year ended 31 December 2002 and reports on key developments to date.
Sir Neville Simms, Chairman of International Power said: "I am pleased to report
excellent financial results from a difficult year for our industry. Our earnings
per share (pre exceptional items) increased 26% to 15.5 pence from 12.3 pence
last year and once again profits were backed by strong free cash flow and
underpinned by good operational performance across the whole of our
geographically balanced asset portfolio."
"2003 will be challenging but we remain confident of delivering a result in line
with our existing guidance. The Group remains firmly focused on creating value
for shareholders through our operational and financial strength." Sir Neville
added.
2002 Financial Highlights:
* Group turnover up 29% to #717 million from #557 million in 2001
* Profit before interest and tax, (excluding exceptional items) up 19%
to #388 million from #326 million last year
* Earnings per share (pre-exceptional items) up 26% on last year at 15.5 p
(post exceptional items 10.1p)
* Profits backed by free cashflow of #252 million, up 41% from #179 million
in 2001
* Gearing: 46%; Debt Capitalisation: 31%
* Receipt of first dividend from KAPCO; continued dividend receipts from
HUBCO
* UK asset impairment charges of #58m for Rugeley in addition to #45m for
Deeside in H1 2002
2002 Operational Highlights:
* Global installed capacity increased 19% in 2002 to 10,890 MW
* Improved technical performance of GT24B turbines - average reliability 96%
* Quick transition to merchant operation at Rugeley following termination of
tolling contract with TXU Europe
* Commenced construction of Shuweihat S1 (1,500 MW power and 100 MIGD water)
plant - first of five gas turbines installed
* Construction of SEAGas pipeline in Australia well underway - over 200 km
of the pipe now installed
* Full capacity at EOP plant in Czech Republic restored in 4 weeks following
boiler house roof collapse
North America
In December 2002 we reached a significant milestone in North America when we
achieved successful completion of our 3,890 MW US construction programme. Our
overall capacity in North America now totals 4,415 MW (net). The 1,395 MW of
new capacity added in 2002 constitutes the completion of the last three units at
Hays in Texas (3 x 275 MW) and both units at Bellingham in New England (2 x 285
MW).
Gross turnover in North America increased to #315 million from #237 million in
2001. Profit before interest and tax increased to #99 million from #93 million,
reflecting the addition of new capacity and continued compensation payments from
Alstom.
Compensation income from Alstom in 2002 was #102 million (#80 million in 2001),
which relates to income lost during the year as a result of delays in the
construction programme and consequent unavailability of plant, in addition to
payments to compensate for reduced output and efficiency.
Operationally, all assets performed well. In particular, our focus has been on
the performance of the Alstom GT24B turbines. Although output and efficiencies
remain below the contractual guarantee figures, the plants have demonstrated
enhanced output, better heat rate and a significant improvement in their
reliability and flexibility.
We made substantial progress during the year in developing our proposed 540 MW
gas-fired Brookhaven project on Long Island in New York. In October last year,
following a 15-month public review, the project received final approval from the
New York State Siting Board. We are currently negotiating commercial contracts
to enable the financing of the project in the expectation that we can commence
construction of this power plant during 2003.
The merchant market in the US is now characterised by a sharp reduction in new
plant development and construction. However, we do expect pricing to remain
weak in our markets as the last of the current build programme becomes
operational. The pace of recovery in 2004 and beyond will depend on the extent
to which existing generators withdraw uneconomic plant, and we welcome the early
evidence of this in Texas. In this regard the current high price of natural gas
in the US further reduces the economic viability of much of the high heat rate
incumbent plant.
Following a small number of refuted technical events of default on the US
non-recourse financing, we are in discussions with our bank group. These
claimed events of default principally relate to the availability of insurance
cover for terrorism (which has now been obtained but was generally not
available post September 11, 2001) and claimed failure to elect early completion
of performance recovery periods. We believe we have constructive and acceptable
plans to resolve all issues to the mutual benefit of both International Power
and the banks. Until these issues are formally resolved and documented, the
debt is reported as current secured non-recourse debt in our accounts. The
maturity of the debt will be re-designated when these discussions reach
successful completion.
In the US, our wholly owned subsidiary, American National Power (ANP), has an
investment grade credit rating. This rating is currently under review by
Moody's who are expected to report in the near future.
Europe and Middle East
Gross turnover in Europe and Middle East decreased 16% to #440 million in 2002
from #521 million in 2001 reflecting the sale of Union Fenosa Generacion (UFG)
in mid 2001, partially offset by the acquisition of Rugeley (UK) at the same
time.
Profit before interest, tax and exceptional items decreased to #109 million from
#141 million in 2001. This was principally due to a weak merchant market in the
UK and the sale of our interest in UFG, but was exacerbated late in 2002 by the
loss of the TXU tolling contract at Rugeley in the UK, and the boiler house roof
collapse at EOP in the Czech Republic.
All assets in this region delivered solid underlying operational performance.
Pego, Deeside and Marmara all consistently achieved high levels of availability.
In November 2002, we faced a major incident when the boiler house roof collapsed
at one of EOP's combined heat and power plants. No one was injured in this
incident, but due to the extent of damage to the boilers, it did result in the
loss of power and heat supply at a critical time in the year for our customers.
Our engineers set themselves an aggressive restoration plan and delivered a
remarkable performance by restoring full heating service within eleven days and
returning the plant to full output just four weeks after the incident.
We reported in December 2002 that as a result of TXU Europe Energy Trading Ltd
entering administration our tolling contract, which covered the full capacity of
the Rugeley power station through to the end of 2005, was terminated. This
triggered an entitlement to a termination payment and we continue to take all
necessary steps to maximise recovery. While we feel that we are well positioned
among creditors, we cannot yet accurately predict either the timing or the
amount of such payments.
The fact that TXU Europe was placed into administration and thereby terminated
our tolling contract, is in itself an event of default for our non-recourse
credit facility of #160 million. We are in discussions with our banks to ensure
a mutually acceptable solution.
In March 2002, as a consequence of uneconomic wholesale electricity prices in
England and Wales, we mothballed half the capacity (250 MW) at Deeside. Due to
this weak pricing and uncertainty on the timing of recovery, we also wrote down
the value of Deeside by #45 million at the half year. For the same underlying
reasons, and as a result of the termination of the tolling contract, we have
written down the value of Rugeley by #58 million at the year-end.
In May 2002, construction commenced at the Shuweihat S1 power and water project
(1,500 MW power, 100 Million Imperial Gallons per Day water) site in Abu Dhabi.
The construction programme continues to make good progress with more than 6
million man hours completed without a single Lost Time Accident. The primary
power and water civil work is nearing completion, and the first of the five gas
turbines has now been installed. The plant remains on course to start operation
in the second half of 2004. Once operational, the power and water output from
the facility will be sold to the Abu Dhabi Water and Electricity Company under a
20-year off-take agreement.
In the second half of 2002, construction of our 285 MW Al Kamil power station in
Oman was completed. The entire capacity at Al Kamil is contracted under a
15-year power purchase agreement with the Omani Ministry of Housing, Electricity
and Water.
Our Italian development programme continues with dual objectives of securing
fully permitted sites for the key projects, and securing long-term off-take
agreements. Progress has been slower than originally planned, principally
driven by uncertainty on the design and implementation of the new market
structure. We do expect more clarity on this issue during 2003, and we remain
focused on successfully delivering projects in Italy, which we continue to
believe is an attractive long-term market for International Power.
In Portugal, Tejo Energia (of which we own 45% and are the largest shareholder)
is developing an 800 MW CCGT plant, which would be located adjacent to the
existing coal-fired Pego plant in central Portugal. Following the submission of
the Environmental Impact Study last year, the public enquiry stage expired in
January 2003 without any comments from the public. As with all new build
projects, we are committed to secure long-term off-take agreements and
discussions have already commenced with potential counter-parties.
Apart from the UK, our highly contracted position, with proven offtakers,
provides good visibility of earnings and cash flow. In the UK, the continued
severe wholesale pricing environment has created severe dislocation in the
sector with almost one third of installed capacity either for sale or in the
hands of the lenders. The pace of recovery will largely depend on what happens
to this generation capacity, but recovery is unlikely to occur in 2003.
Australia
Our performance in Australia illustrates the merits of a geographically diverse
asset portfolio. Our forward contracted position at Hazelwood and Pelican
Point, together with greater profitability at the Synergen peaking plants, led
to enhanced financial performance in the region.
Turnover in Australia increased by 16% to #226 million from #194 million in
2001. Profit before interest and tax was up 40% to #101 million from #72
million in 2001. Our average price achieved in Victoria was approximately A$41
per MW hour, up approximately 17% on 2001. As we own our fuel supply at
Hazelwood (our largest plant in Australia), this translates directly into
improved profitability.
During the year we made significant progress on the SEAGas pipeline project in
which we have a 33% equity interest together with TXU Australia and Origin
Energy. Construction of the pipeline from western Victoria to Adelaide is well
underway with over 200 km of pipe now installed. This project not only helps to
secure our future gas supplies at more competitive prices, but also represents
an attractive investment in its own right. In May 2002, the project achieved
financial close. The pipeline remains on track to start operation in the first
quarter of 2004.
Rest of World
Gross turnover decreased to #148 million from #151 million in 2001. Profit
before interest, tax and exceptional items increased to #108 million from #48
million last year. The principal driver behind this growth was the commencement
of regular dividend receipts from Kot Addu Power Company (KAPCO) and Hub Power
Company (HUBCO) in Pakistan. We continue to maintain close working
relationships with WAPDA, our customer for both Companies.
At KAPCO, dividend payments totalling #42 million relating to the settlement of
prior year receivables were treated as an exceptional item due to their
non-recurring nature.
All assets in this region also delivered good operational performance. A
highlight was our Pluak Daeng plant in Thailand that delivered robust financial
and operational performance (98% availability) and also received ISO 14001
Environmental Management accreditation in 2002.
In Malaysia, the ongoing 650 MW plant expansion at Malakoff's Lumut site was
completed in 2002. The final 230 MW of capacity commenced combined cycle
operation in November, approximately three months ahead of schedule. Malakoff's
total installed capacity is now 1,705 MW (gross), all of which is contracted
under long-term power purchase agreements with Tenaga Nasional Berhad.
Cash Flow and Balance Sheet
Cash Flow
A summary of the Group cash flow is set out below.
#m Year Ended Year Ended
31 December 2002 31 December 2001
Operating profit (pre JV's & associates) - post 105 163
exceptionals
Impairment 103 -
---------- ----------
Sub-Total 208 163
Depreciation and amortisation 112 95
Movement in working capital & provisions (44) 16
Dividends from JV's/associates/investments 115 59
---------- ----------
Operating cash flow 391 333
Capital expenditure - maintenance (48) (48)
Interest and tax (108) (106)
Exceptional items
- Kapco dividend 42 -
- Hazelwood refinancing (25) -
---------- ----------
Free cash flow 252 179
Capital expenditure - growth (98) (358)
Acquisitions & disposals (144) 318
Foreign exchange translation 75 35
---------- ----------
Movement in net debt 85 174
Opening net debt (897) (1,071)
---------- ----------
Closing net debt (812) (897)
---------- ----------
Operating cash flow for the year ended 31 December 2002 increased by 17% to #391
million as compared to #333 million for the year ended 31 December 2001. The
principal drivers include strong operating profit performance, an increase in
dividend receipts from joint ventures and associates and the resumption of
dividends from KAPCO. Capital expenditure on projects designed to maintain the
operating capacity of our power stations was in line with the expenditure
incurred in the previous year, reflecting the recurring and on-going nature of
this expenditure.
Capital expenditure to increase our operating capacity amounted to #98 million
as compared to #358 million for the year ended 31 December 2001. This programmed
reduction in our capital expenditure reflects the progressive completion of our
new build capacity in Massachusetts and Texas.
Net interest of #86 million (2001: #105 million) was paid in the year reflecting
a small reduction in average debt levels over the course of the year, together
with a slightly lower average cost of debt. Net tax payments in the year were
#20 million (2001: #1 million). Acquisitions and disposals include a final
payment of #133 million to TXU Europe in respect of the acquisition of our 1,000
MW Rugeley power station in the UK.
Balance Sheet
A summarised, re-classified presentation of the Group balance sheet is set out
below:
#m Year Ended 2002 Year Ended 2001
Fixed assets
Intangibles & tangibles 2,474 2,643
Investments 507 509
-------- --------
2,981 3,152
Net current liabilities (138) (320)
Provisions and creditors > 1 yr (262) (238)
Net debt (812) (897)
-------- --------
Net assets 1,769 1,697
-------- --------
Gearing 46% 53%
Debt capitalisation 31% 35%
Net assets at 31 December 2002 increased #72 million to #1,769 million, as
compared to #1,697 million at the end of the previous year. This reflects our
underlying profitability at #113 million, principally offset by #42 million
reflecting the impact of foreign exchange on the net investment in foreign
entities and their related borrowings.
Net debt at 31 December 2002 of #812 million is down from #897 million at 31
December 2001, reflecting the strong operating cash flow of the business and the
positive impact of the translation of debt denominated in foreign currencies,
which amounted to #98 million over the course of the year.
The above net debt of #812 million, excludes our share of joint ventures and
associates debt of #503 million (2001: #487 million). These obligations are
generally secured by the assets of the respective joint venture or associate
borrower and are not guaranteed by International Power plc or any other Group
company. In view of the significance of this amount, it has been disclosed
separately.
As mentioned in the regional summaries, we are in discussions with bank groups
in relation to the non-recourse debt for Rugeley and the US merchant asset
portfolio. Until these issues are formally resolved and documented, the debt at
Rugeley and ANP is reported as current secured non-recourse debt in our
accounts. The maturity of the debt will be re-designated when these discussions
reach a successful conclusion. In line with all non-recourse finance, any
support to either of these facilities would be entirely discretionary, and would
not have a material impact on the Group's liquidity or investment capability.
Outlook
Two of our key merchant markets (US and UK) are at a low point in their cycles,
with oversupply driving wholesale prices to uneconomic levels. Further removals
of inefficient capacity are required to initiate any price recovery. There are
indications that such removals of inefficient capacity will occur but not so
quickly as to cause a significant improvement in power prices during 2003.
We remain focused on operational excellence and fiscal discipline. With respect
to 2003, based on consistent assumptions of no acquisitions, no significant
price recovery in Texas, New England and the UK, recurring Pakistan revenue, and
no currency translation effects, our earnings per share guidance remains in the
range of 9p to 11p.
For further information please contact:-
Media contact:
Aarti Singhal
+44 (0)207-320-8681
Investor contact:
Grant Jones
+ 44 (0)207-320-8619
About International Power:
International Power plc is a leading independent electricity generating company
with 10,890MW (net) in operation, 300MW (net) under construction. Among the
countries where International Power has facilities in operation or under
construction are Australia, the United States, the United Kingdom, the Czech
Republic, the UAE, Portugal, Turkey, Malaysia, Pakistan, and Thailand.
International Power was created from the de-merger of National Power, and its
shares began trading independently on the London Stock Exchange and as ADRs on
the New York Stock Exchange on 2 October 2000. The ticker symbol on both stock
exchanges is "IPR".
International Power plc
Consolidated Profit and Loss Account
For the year ended 31 December 2002
Year ended 31 December Year ended 31 December
Excluding Exceptional Including Excluding Exceptional Including
exceptional items exceptional exceptional items exceptional
items items items items
2002 2002 2002 2001 2001 2001
(restated*) (restated*) (restated*)
#m #m #m #m #m #m
Turnover: Group and share of 2 1,129 - 1,129 1,103 - 1,103
joint ventures and associates
Less: share of joint ventures' (122) - (122) (139) - (139)
turnover
Less: share of associates' (290) - (290) (407) - (407)
turnover
------- ------- ------- ------- ------- -------
Group turnover 717 - 717 557 - 557
Net operating costs 3 (509) (103) (612) (392) (2) (394)
------- ------- ------- ------- ------- -------
Operating profit 208 (103) 105 165 (2) 163
Share of operating profit of:
Joint ventures 26 - 26 27 - 27
Associates 123 - 123 134 - 134
Income from investments 31 42 73 - - -
------- ------- ------- ------- ------- -------
Operating profit and investment 388 (61) 327 326 (2) 324
income
Non operating exceptional items 3 - - - 32 32
------- ------- ------- ------- ------- -------
Profit on ordinary activities 2 388 (61) 327 326 30 356
before interest and taxation
Net interest and similar
charges
------- ------- ------- ------- ------- -------
Group (97) - (97) (76) (29) (105)
Joint ventures and associates (35) - (35) (47) - (47)
------- ------- ------- ------- ------- -------
(132) - (132) (123) (29) (152)
------- ------- ------- ------- ------- -------
Profit on ordinary activities 256 (61) 195 203 1 204
before taxation
Taxation (77) 1 (76) (64) - (64)
------- ------- ------- ------- ------- -------
Profit on ordinary activities 179 (60) 119 139 1 140
after taxation
Minority interests - equity (6) - (6) (2) - (2)
------- ------- ------- ------- ------- -------
Profit for the financial year 173 (60) 113 137 1 138
==== ==== ==== ==== ==== ====
Earnings per share
Basic 15.5p (5.4)p 10.1p 12.3p - 12.3p
------- ------- ------- ------- ------- -------
Diluted 15.5p (5.4)p 10.1p 12.0p - 12.0p
------- ------- ------- ------- ------- -------
* Restated for the adoption of FRS 19 Deferred tax (see note 1: Basis of
preparation)
Consolidated Balance Sheet
As at 31 December 2002
31 December 31 December
2002 2001
(restated*)
#m #m
Fixed assets
Intangible assets 1 (5)
Tangible assets 2,473 2,648
Investments 507 509
------- -------
Total fixed assets 2,981 3,152
------- -------
Current assets
Stocks 55 25
Debtors 134 158
Investments 43 47
Cash at bank and in hand 799 596
------- -------
Total current assets 1,031 826
Creditors: amounts falling due within one
year
------- -------
Secured loans without recourse 4 (810) (112)
Other current liabilities (595) (503)
------- -------
Creditors: amounts falling due within one (1,405) (615)
year
------- -------
Net current (liabilities)/assets (374) 211
------- -------
Total assets less current liabilities 2,607 3,363
Creditors: amounts falling due after more (583) (1,436)
than one year
Provisions for liabilities and charges (255) (230)
------- -------
Net assets employed 1,769 1,697
==== ====
Capital and reserves
Shareholders' funds - equity 1,740 1,670
Minority interests - equity 29 27
------- -------
Total equity 1,769 1,697
==== ====
------- -------
Net debt (812) (897)
Gearing 45.9% 52.9%
Debt capitalisation 31.5% 34.6%
------- -------
The gearing percentage represents net debt as a proportion of net assets
employed. The debt capitalisation percentage represents net debt as a percentage
of net assets employed plus net debt.
* Restated for the adoption of FRS 19 Deferred tax (see note 1: Basis of
preparation)
Consolidated Cash Flow Statement
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
#m #m
Net cash inflow from operating activities 5 276 274
Dividends received from joint ventures and associates 84 59
Dividends received from fixed asset investments - ordinary 31 -
------- -------
391 333
Dividends received from fixed asset investments 42 -
- exceptional
Returns on investments and servicing of finance (88) (105)
- ordinary
- exceptional (25) -
Taxation (20) (1)
Capital expenditure and financial investment (159) (406)
Acquisitions and disposals (144) 318
------- -------
Net cash (outflow)/ inflow before management of liquid (3) 139
resources and financing activities
Management of liquid resources - (48)
Financing activities 210 406
------- -------
Increase in cash in period 207 497
==== ====
#m #m
Increase in cash in period 207 497
Cash inflow from increase in debt and lease financing (210) (406)
Cash outflow from increase in liquid resources - 48
------- -------
Change in net debt resulting from cash flows (3) 139
Translation differences 98 17
Other non-cash movements (10) 18
------- -------
Movement in net debt in the period 85 174
Net debt at the start of the period (897) (1,071)
------- -------
Net debt at the end of the period (812) (897)
==== ====
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
(restated *)
#m #m
Profit for the financial period 113 138
Exchange differences on the retranslation of net investments (42) (4)
and borrowings (net of #10 million tax)
Share of recognised (loss)/ gain of associated undertaking (1) 2
------- -------
Total recognised gains and losses for the period 70 136
====
Prior period adjustment (see note 1: Basis of preparation) (155)
-------
Total recognised gains and losses since last annual report (85)
====
Reconciliation of movements in shareholders' funds - equity
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
(restated *)
#m #m
Profit for the financial period 113 138
Other recognised gains and losses relating to the period (43) (2)
(net)
------- -------
Net addition to shareholders' funds 70 136
------- -------
Opening shareholders' funds as originally stated 1,825 1,683
Prior year adjustment (155) (149)
------- -------
Opening shareholders' funds as restated 1,670 1,534
------- -------
Closing shareholders' funds 1,740 1,670
==== ====
* Restated for the adoption of FRS 19 Deferred tax (see note 1: Basis of
preparation)
Notes to the Accounts
Year ended 31 December 2002
1. Basis of preparation
The accounts for the year ended 31 December 2002 have been prepared under the
historical cost convention and in accordance with applicable Accounting
Standards, using the same accounting policies as those adopted for the year
ended 31 December 2001, other than those required following the adoption of FRS
19. The comparative figures for the year ended 31 December 2001 have been
restated for this change in accounting policy. The adoption of FRS 19 has
decreased the equity shareholders' funds at 1 January 2002 by #155 million net,
being decreases in respect of deferred tax provisions and investments of #170
million and #6 million respectively, offset by an increase in shareholders'
funds of #21 million in respect of intangible assets. The profit for the year
ended 31 December 2001 was decreased by #6 million.
2. Geographical segmental analysis
Year ended Year ended
31 December 31 December
2002 2001
#m #m
Group turnover
North America 315 237
Europe and Middle East 440 521
Australia 226 194
Rest of World 148 151
------- -------
1,129 1,103
Less: turnover of joint ventures (122) (139)
Less: turnover of associates (290) (407)
------- -------
717 557
==== ====
Profit before interest and taxation (excluding
exceptional items)
North America 99 93
Europe and Middle East 109 141
Australia 101 72
Rest of World 108 48
------- -------
417 354
Corporate costs (29) (28)
------- -------
388 326
==== ====
Notes
1. North America profit before interest and taxation includes other income
in respect of the late commissioning and performance recovery of new
power plants amounting to #102 million (year ended 31 December 2001: #80
million).
3. Exceptional items
Year ended Year ended
31 December 31 December
2002 2001
#m #m
Net operating exceptional items charged / (credited)
Deeside impairment 45 -
Rugeley impairment 58 -
Release of a provision in respect of an onerous property - (8)
lease
Bank guarantee charge in respect of a trade - 10
investment
------- -------
Net operating exceptional items 103 2
==== ====
Exceptional income from investments
Backlog dividend received from KAPCO (42) -
==== ====
Non operating exceptional items charged/ (credited)
Sale of Spanish operations (UFG) - (30)
Sale of Chinese operations - (2)
------- -------
Non-operating exceptional items - (32)
==== ====
Exceptional interest payable and similar charges
Australian refinancing charges - 29
==== ====
Total exceptional items before attributable taxation 61 (1)
Taxation on exceptional items (1) -
------- -------
Total exceptional items after attributable taxation 60 (1)
==== ====
4. Secured bank loans without recourse
We are in discussions with bank groups in relation to non-recourse debt for
Rugeley and the US merchant asset portfolio. Until these issues are formally
resolved and documented, the debt at Rugeley and ANP is reported as current non-
recourse debt in our accounts. Secured bank loans without recourse are those
where the obligation to repay lies solely with the subsidiary and are secured
solely on the assets of the subsidiary concerned.
5. Reconciliation of operating profit to net cash inflow from
operating activities
Year ended Year ended
31 December 31 December
2002 2001
#m #m
Operating profit 105 163
Impairment 103 -
------- -------
208 163
Depreciation and amortisation 112 94
Movement in working capital (47) 34
Movement in provisions 3 (18)
Other non-cash movements - 1
------- -------
Net cash inflow from operating activities 276 274
==== ====
6. Statutory Accounts
The financial information set out above does not constitute the Group's
statutory accounts for the year ended 31 December 2002 and the year ended 31
December 2001, but is derived from those accounts. Statutory accounts for the
year ended 31 December 2001 have been delivered to the registrar of companies.
Those for the year ended 31 December 2002 will be delivered following the
company's annual general meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under section
237(2) or (3) of the Companies Act 1985.
7. Annual Report and Accounts
Copies of the full Annual Report and Accounts for the year ended 31 December
2001 and the preliminary statement for the year ended 31 December 2002 are
available from the company's website www.ipplc.com or by calling or writing to
International Power plc, Senator House, 85 Queen Victoria Street, London EC4V
4DP or sending an e-mail to ipinvestor.relations@ipplc.com. Telephone: 020 7320
8600. The Annual Report and Accounts for the year ended 31 December 2002 will be
sent to shareholders shortly and will be available from the company's website.
Consolidated Profit and Loss Account
For the three months ended 31 December 2002
Quarter to 31 December Quarter to 31 December
Excluding Exceptional Including Excluding Exceptional Including
exceptional items exceptional exceptional items exceptional
items items items items
2002 2002 2002 2001 2001 2001
(restated*) (restated*) (restated*)
#m #m #m #m #m #m
Turnover: Group and share of 2 270 - 270 243 - 243
joint ventures and associates
Less: share of joint ventures' (37) - (37) (37) - (37)
turnover
Less: share of associates' (62) - (62) (66) - (66)
turnover
------- ------- ------- ------- ------- -------
Group turnover 171 - 171 140 - 140
Net operating costs 3 (143) (58) (201) (101) (2) (103)
------- ------- ------- ------- ------- -------
Operating profit 28 (58) (30) 3 9 (2) 3 7
Share of operating profit of:
Joint ventures 9 - 9 7 - 7
Associates 30 - 30 40 - 40
Income from investments 9 11 20 - - -
------- ------- ------- ------- ------- -------
Operating profit and investment 76 (47) 29 86 (2) 84
income
Non operating exceptional items 3 - - - - 2 2
------- ------- ------- ------- ------- -------
Profit on ordinary activities 2 76 (47) 29 86 - 86
before interest and taxation
Net interest and similar
charges
------- ------- ------- ------- ------- -------
Group (21) - (21) (30) (29) (59)
Joint ventures and associates (9) - (9) (9) - (9)
------- ------- ------- ------- ------- -------
(30) - (30) (39) (29) (68)
------- ------- ------- ------- ------- -------
Profit on ordinary activities 46 (47) (1) 47 (29) 18
before taxation
Taxation (14) (3) (17) (15) - (15)
------- ------- ------- ------- ------- -------
Profit on ordinary activities 32 (50) (18) 32 (29) 3
after taxation
Minority interests - equity (2) - (2) 2 - 2
------- ------- ------- ------- ------- -------
Profit for the financial period 30 (50) (20) 34 (29) 5
==== ==== ==== ==== ==== ====
Earnings per share
Basic 2.7p (4.5)p (1.8)p 3.0p (2.6)p 0.4p
==== ==== ==== ==== ==== ====
Diluted 2.7p (4.5)p (1.8)p 3.0p (2.6)p 0.4p
==== ==== ==== ==== ==== ====
* Restated for the adoption of FRS 19 Deferred tax (see note 1: Basis of
preparation)
Consolidated Balance Sheet
As at 31 December 2002
31 December 31 December
2002 2001
(restated *)
#m #m
Fixed assets
Intangible assets 1 (5)
Tangible assets 2,473 2,648
Investments 507 509
------- -------
Total fixed assets 2,981 3,152
------- -------
Current assets
Stocks 55 25
Debtors 134 158
Investments 43 47
Cash at bank and in hand 799 596
------- -------
Total current assets 1,031 826
Creditors: amounts falling due within one year
------- -------
Secured loans without recourse 4 (810) (112)
Other liabilities (595) (503)
------- -------
Creditors: amounts falling due within one year (1,405) (615)
------- -------
Net current (liabilities)/assets (374) 211
------- -------
Total assets less current liabilities 2,607 3,363
Creditors: amounts falling due after one more (583) (1,436)
than one year
Provisions for liabilities and charges (255) (230)
------- -------
Net assets employed 1,769 1,697
==== ====
Capital and reserves
Shareholders' funds - equity 1,740 1,670
Minority interests - equity 29 27
------- -------
Total equity 1,769 1,697
==== ====
------- -------
Net debt (812) (897)
Gearing 45.9% 52.9%
Debt capitalisation 31.5% 34.6%
------- -------
The gearing percentage represents net debt as a proportion of net assets
employed. The debt capitalisation percentage represents net debt as a percentage
of net assets employed plus net debt.
* Restated for the adoption of FRS 19 Deferred tax (see Note 1 Basis of
preparation)
Consolidated Cash Flow Statement
For the quarter ended 31 December 2002
Quarter to Quarter to
31 December 31 December
2002 2001
#m #m
Net cash inflow from operating activities 52 114
Dividends received from joint ventures and associates 13 17
Dividends received from fixed asset investments - ordinary 9 -
------- -------
74 131
Dividends received from fixed asset investments - exceptional 11 -
Returns on investments and servicing of finance (19) (7)
Taxation (4) (4)
Capital expenditure and financial investment (46) (76)
Acquisitions and disposals (4) (1)
------- -------
Net cash inflow before management of liquid resources and 12 43
financing activities
Management of liquid resources 22 (48)
Financing activities (14) 88
------- -------
Increase in cash in period 20 83
==== ====
#m #m
Increase in cash in period 20 83
Cash outflow/(inflow) from increase in debt and lease financing 14 (88)
Cash (inflow)/outflow from decrease in liquid resources (22) 48
------- -------
Change in net debt resulting from cash flows 12 43
Translation differences 14 -
Other non-cash movements (8) (13)
------- -------
Movement in net debt in the period 18 30
Net debt at the start of the period (830) (927)
------- -------
Net debt at the end of the period (812) (897)
==== ====
Consolidated Statement of Total Recognised Gains and Losses
For the quarter ended 31 December 2002
Quarter to Quarter to
31 December 31 December
2002 2001
(restated *)
#m #m
(Loss)/profit for the financial period (20) 5
Exchange differences on the retranslation of net investments 1 10
and borrowings (net of tax)
Share of recognised loss of associated undertaking (1) -
------- -------
Total recognised gains and losses for the period (20) 15
==== ====
Quarter to Quarter to
31 December 31 December
2002 2001
(restated *)
#m #m
(Loss)/profit for the financial period (20) 5
Other recognised gains and losses relating to the period (net) - 10
------- -------
Net (reduction from)/ addition to shareholders' funds (20) 15
------- -------
Opening shareholders' funds as originally stated 1,760 1,810
Prior year adjustment - (155)
------- -------
Opening shareholders' funds as restated 1,760 1,655
------- -------
Closing shareholders' funds 1,740 1,670
==== ====
*Restated for the adoption of FRS 19 Deferred tax (see Note 1 Basis of
preparation)
Notes to the Accounts
Quarter ended 31 December 2002
1. Basis of preparation
The accounts for the three months ended 31 December 2002 have been prepared
using the same accounting policies as those adopted for the year ended 31
December 2001, other than those required following the adoption of FRS 19. The
comparative figures for the year ended 31 December 2001 and the quarter ended 31
December 2001 have been restated for this change in accounting policy. The
adoption of FRS 19 has decreased the equity shareholders' funds at 1 October
2001 by #155 million net, being decreases in deferred tax provisions and
investments of #170 million and #6 million respectively, offset by an increase
in shareholders' funds of #21 million in respect of intangible assets. The
impact on the profit for the quarter ended 31 December 2001 was nil.
The financial information for the year ended 31 December 2001 is derived from
the statutory accounts for that period, which have been delivered to the
registrar of companies. The auditors have reported on the accounts for the year
ended 31 December 2001, their report was unqualified and did not contain
statements under Section 237 of the Companies Act 1985. The financial
information included for the three months ended 31 December 2001 and 2002 is
unaudited
2. Geographical segmental analysis
Quarter to Quarter to
31 December 31 December
2002 2001
#m #m
Group turnover
North America 79 40
Europe and Middle East 107 127
Australia 53 51
Rest of World 31 25
------- -------
270 243
Less: turnover of joint ventures (37) (37)
Less: turnover of associates (62) (66)
------- -------
171 140
==== ====
Profit before interest and taxation (excluding exceptional
items)
North America 11 21
Europe and Middle East 20 30
Australia 25 17
Rest of World 30 23
------- -------
86 91
Corporate costs (10) (5)
------- -------
76 86
==== ====
Notes
1. North America profit before interest and taxation includes other income in respect of the late
commissioning and performance recovery of new power plants amounting to #24 million (quarter
ended 31 December 2001: #34 million).
3. Exceptional items
Quarter to Quarter to
31 December 31 December
2002 2001
#m #m
Net operating exceptional items charged/ (credited)
Rugeley impairment 58 -
Release of a provision in respect of an onerous property - (8)
lease
Bank guarantee charge in respect of a trade investment - 10
------- -------
Net operating exceptional items 58 2
==== ====
Exceptional income from investments
Backlog dividend received from KAPCO (11) -
==== ====
Non-operating exceptional items charged / (credited)
Sale of Spanish operations (UFG) - -
Sale of Chinese operations - (2)
------- -------
Non-operating exceptional items - (2)
==== ====
Exceptional interest payable and similar charges
Australian refinancing charges - 29
==== ====
Total exceptional items before attributable taxation 47 29
Taxation on exceptional items 3 -
------- -------
Total exceptional items after attributable taxation 50 29
==== ====
4. Bank loans without recourse
We are in discussions with bank groups in relation to non-recourse debt for
Rugeley and the US merchant asset portfolio. Until these issues are formally
resolved and documented, the debt at Rugeley and ANP is reported as current non-
recourse debt in our accounts. Secured bank loans without recourse are those
where the obligation to repay lies solely with the subsidiary and are secured
solely on the assets of the subsidiary concerned.
5. Annual Report and Accounts
Copies of the full Annual Report and Accounts for the year ended 31 December
2001 are available from the company's website www.ipplc.com or by calling or
writing to International Power plc, Senator House, 85 Queen Victoria Street,
London EC4V 4DP or send an e-mail to ir@ipplc.com. Telephone: 020 7320 8600.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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