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British Energy profits beat expectations

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Nuclear power operator British Energy said core earnings fell 28% last year, but were still ahead of analysts’ expectations due to higher prices in the final quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to £882 million from 1.22 billion a year earlier. Analysts had expected EBITDA of just under £800 million, according to Reuters Estimates. CEO Bill Coley said on Wednesday the overall financial performance was disappointing, and that the boost to prices -- helped by the soaring cost of oil -- would not make a big impact on the 2008/09 year due to forward selling.

British Energy owns eight nuclear power stations and is currently a takeover target for some of Europe’s biggest utilities. It has been in play since the government gave the green light to new nuclear build in January. Coley said he was pleased with the operational side of the company despite Tuesday’s first unplanned shutdown at its Sizewell B reactor for three and a half years. “It appears to be an instrument problem. There is no issue with the plant and it should return (to operation) very quickly,” he told reporters. He denied the fault had harmed the company’s credibility. “Sizewell is a marvellous plant -- it’s as well as any plant in the European Union,” he said.

However, shares in the company fell 1% to 729-1/2 pence by 9:27 a.m. despite beating the market consensus. “It’s slightly surprising. Maybe some people are concerned about the Sizewell outage,” said Credit Suisse analyst Colin Pollock.

One trader said that a lack of news of potential bidders may also be weighing on the stock. Seen as key to the government’s plans to build new nuclear power stations, the company received a bid from France’s EdF of just under 700 pence a share earlier this month, and has said it is in talks with several other parties. Coley refused to comment on the takeover situation, nor his personal plans should the company -- 35% owned by the government -- be sold off. The dividend was maintained at 13.6 pence a share. (Reuters)

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