Adjust for the effects of combining GDF SUEZ with
Indeed, performance was boosted by a new hydro-electric power plant in Estreito, Brazil, as well as new projects in Chile and Panama, and Latin American pro forma operating profit grew 18 per cent to €1.33bn. Although cost overruns at the Brazilian Jirau hyrdo-electric power plant have reached BRL1.6bn (£0.58bn) - analysts estimate that at around 10p a share. Meanwhile, the North American business grew organic pro forma operating income 49 per cent of €575m, as liquefied natural gas (LNG) supplies delivered higher margins after being diverted to feed Asian demand. The European business, however, was hit by continued UK difficulties and pro forma operating income there fell 32 per cent to €341m. But the Middle East saw steady growth with a new plant opened in Turkey, helping to lift pro forma operating income here 7 per cent to €384m.
Deutsche Bank expects pre-tax profit of €2.49bn for 2012, giving EPS of 32¢.
|INTERNATIONAL POWER (IPR)|
|ORD PRICE:||332p||MARKET VALUE:||£16.9bn|
|TOUCH:||331-332p||12-MONTH HIGH:||350p||LOW: 263p|
|DIVIDEND YIELD:||2.8%||PE RATIO:||14|
|NET ASSET VALUE:||369¢*||NET DEBT:||56%|
Performance looks good, but management sounds a tad cautious about the outlook, Specifically, growth will be hit by contracts rolling off in North America and fewer benefits from LNG diversions. Jirau delays and lower power prices in Brazil won't help either. That leaves a forward PE of 12 looking up with events. Hold.
Last IC view: Fairly priced, 286p, 10 August 2011