21st Jan 2015 10:00
LONDON (Alliance News) - Alkane Energy PLC said Wednesday it expects its 2014 power sales to be up year-on-year, but it expects its adjusted pretax profit to be broadly flat after operational issues held back its financial performance and its average selling price declined.
The gas-to-power producer said it expects power sales for the year to December 31 to reach around 200 gigawatt hour, up from 192 gigawatt hour in 2013. But it expects its average selling price to fall slightly, down to GBP52 megawatt hour against GBP53 megawatt hour the previous year.
Alkane said it expects its adjusted pretax profit for the year to be between GBP3.25 million and GBP3.5 million, broadly in line with the GBP3.4 million it posted in 2013. The group was hit by operational issues over the year, including delays to the commissioning of its Wheldale and Shirebrook facilities and said it experienced fewer-than-expected calls from National Grid under the STOR programme.
The company said it has secured stable pricing for 2015 and 2016. It has contracted around 82% of its expected 2015 base load output at an average price of GBP52 megawatt hour and has secured GBP51 megawatt hour on 30% of its expected base load output for 2016. Current market prices for the balance of 2016 are at around GBP45 megawatt hour, it said.
Alkane said the fall in selling prices will have a negative impact on base load margins, but said its power response business is benefiting from lower gas prices.
The company said it is on track for its coal mine methane project pipeline, with a new drill to start in Stoke in 2015 and the build phase of the Markham Main site in Yorkshire to start in the second half. The company said its pipeline leaves it well placed to increase output in 2015.
"We have been busy integrating and upgrading sites in 2014, which was another year of good solid progress for Alkane. We have made a strong start to the new financial year with record production and have secured stable pricing for 2015. We are well placed to increase output in the coming year and are confident of reporting further growth," said Neil O'Brien, Chief Executive Officer of Alkane.
Still, Alkane shares were down 8.4% to 23.25 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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