British Energy Posts Quarterly Loss on Plant Closures

By Paul Dobson

Nov. 18 (Bloomberg) -- British Energy Group Plc, the U.K. power producer being bought by Electricite de France SA for 12.5 billion pounds ($18.8 billion), reported a second-quarter loss following reactor halts and said output may rise in 2009.

The net loss in the three months through Sept. 28 was 39 million pounds, or 3.8 pence a share, compared with a profit of 64 million pounds, or 6.2 pence, a year earlier, the East Kilbride, Scotland-based company said today in a statement.

The electricity producer said Oct. 7 that output from its eight nuclear stations and one coal-fired plant fell 33 percent in the three-month period to 11.3 terawatt-hours. It said Oct. 10 that repairs to two reactors are behind schedule and costs will be higher than expected. The company loses money when its power stations stop unexpectedly.

Five of British Energy's 16 power-station units will return to service before the end of the year, boosting prospects for electricity production in the second half, Chief Executive Officer Bill Coley said in the statement. He described repair work at the Hartlepool and Heysham-1 plants as ``challenging.''

Reactor shutdowns have hurt British Energy's production and earnings the past two years and Coley has sought to improve the plants' reliability and secure extensions for their operating lives. Coley and Finance Director Stephen Billingham will remain with British Energy during the transition to EDF ownership, the French company said Nov. 5.

Generator Starts

British Energy will start two of four generators at the Hartlepool and Heysham-1 plants before the end of the year and the other two early next year, the utility said today in the statement. Work to fit so-called circumferential bands, which will increase the safety of the units, is complete at Heysham-1's Reactor 1, it said.

A unit of the Dungeness-B nuclear station will start in December, while Heysham-2's Reactor 7 is ``in the process of returning to service.''

EDF agreed on Sept. 24 to buy British Energy to add generation in the U.K. and build new reactors. The accord ended four months of wrangling, handing EDF Chief Executive Officer Pierre Gadonneix control of eight U.K. nuclear sites.

The purchase by EDF, whose 58 nuclear units produced 77 percent of France's power last year, comes as U.K. Prime Minister Gordon Brown seeks to cut energy imports and reduce emissions.

Centrica Plc, the U.K.'s biggest energy supplier, has a non- binding agreement to buy a 25 percent stake in British Energy, once EDF completes the acquisition.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net