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Nuclear outages halve British Energy Q1 earnings

Nuclear operator British Energy said lower output following nuclear power station outages cut its first quarter profit in half.

The group, whose shareholders rejected a Ł12 billion ($22.84 billion) takeover bid by France's EDF this month, said first quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell to Ł129 million.

“We have continued to make good progress towards resolving the plant issues that have significantly impacted our performance in the year to date,” Chief Executive Bill Coley told reporters.

He added that the Hartlepool and Heysham 1 stations were on track to return to service in the group's third quarter, although he would not put a return date on units at Dungeness B.

The results were a lot better than some analysts expected. Deutsche Bank said in a preview note it was forecasting adjusted EBITDA of Ł55 million, with performance to improve as high wholesale power prices feed into the numbers.

British Energy said it “continue(s) discussions in respect of a potential transaction” despite the collapse of the all-cash EDF offer nearly two weeks ago, but refused to comment on the specific details of the talks.

“We have many shareholders and many shares in issue and I would be hard pressed to try and characterize the general sentiment of those shareholders,” Coley said.

He added that the company remained committed to new nuclear build - given the green light by the government in January - and was currently assessing which of its sites were suitable.

EDF has not formally given up on agreeing a takeover, while British Gas-owner Centrica is said by sources to have revived earlier attempts at a merger - either all-share or cash-and-shares.

The government is known to want to cash in its 35% holding and has said it preferred the all-cash route offered by EDF, which has the experience in new nuclear build deemed important as Britain prepares to construct new power stations. (Reuters)