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Enron Mail |
ROMANIA: Enron exits gas marketing deal with Romania's SNP.
Reuters English News Service, 04/19/01 Blockbuster Swings to 1st-Quarter Profit Amid Solid Revenue Growth Dow Jones Business News, 04/19/01 INDIA: UPDATE 1-Enron India unit lenders to meet on April 23. Reuters English News Service, 04/19/01 Enron Ends Gas Import, Marketing Venture With Romania's Petrom Bloomberg, 04/19/01 Davis' gouging claims disputed Officials say no link between PG&E bankruptcy, high prices San Francisco Chronicle, 04/19/01 ROMANIA: Enron exits gas marketing deal with Romania's SNP. 04/19/2001 Reuters English News Service (C) Reuters Limited 2001. BUCHAREST, April 19 (Reuters) - Enron Capital BV, a unit of U.S. energy group Enron Corp has given up a marketing deal with Romania's state oil company SNP Petrom by assigning its stake in a gas joint venture to SNP, officials said on Thursday. "Enron agreed to freely transfer to its 50 percent stake to the SNP," SNP's Gabriel Nastase said. "They left the venture after failure to handle (for SNP) gas imports as planned." Petrom-Enron Gas SRL, was created in 1998 as a 10-year joint venture, with the two firms each owning 50 percent. Nastase said Enron had complained that it could not access Romania's national gas transport pipelines to handle the planned imports. He said the SNP was currently seeking a new partner to replace Enron in the venture but gave no other details. Enron officials were not immediately available for comment. SNP plans to extract 6.28 billion cubic metres of gas this year, slightly up from 6.17 billion in 2000. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Blockbuster Swings to 1st-Quarter Profit Amid Solid Revenue Growth 04/19/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) DALLAS -- Blockbuster Inc. swung to a first-quarter profit amid solid revenue growth, while cash earnings easily exceeded Wall Street expectations. The video-rental company Thursday posted net income of $4.7 million, or three cents a share, compared with a year-earlier loss of $4.1 million, or two cents a share. Revenue rose 8.3% to $1.31 billion from $1.21 billion. Blockbuster (BBI), a unit of Viacom Inc., posted cash earnings, which excludes amortization-related costs, of $46.5 million, or 27 cents a share, compared with $38.1 million, or 22 cents a share, a year earlier. Analysts expected earnings of 24 cents a share, according to Thomson Financial/First Call. Viacom (VIA, VIAB) has given up on its plans to split off Blockbuster now that the video-rental giant's business has turned around so well in the past few years. For more than a year, Viacom had said it was waiting for a recovery in Blockbuster's stock -- long stalled below its offering price -- before it went ahead with previously announced plans to split off the remaining 82.3% of the publicly traded unit. During the quarter, operating expenses increased to $725.4 million from $670 million a year earlier. The company attributed the rise to the growth in the number of stores and investments. Earnings before interest, income taxes, depreciation and amortization, or Ebitda, rose 6.8% to $160.5 million. Free cash flow, or income before depreciation and amortization less capital expenditures, soared 67% to $99.9 million. Looking forward, Blockbuster expects second-quarter revenue to remain flat with year-earlier results because of strong movie titles during that period. Analysts surveyed by First Call expect earnings of 10 cents a share. In the year-earlier period, the company reported a loss of $27.9 million, or 16 cents a share, on revenue of $1.21 billion. For 2001, Blockbuster expects world-wide same-store revenue to grow in the low single digit range, while capital expenditures are expected to reach about $150 million to $175 million. Blockbuster also expects to generate "solid" cash-earnings growth for the year. It also plans to add about 200 to 250 company-operated stores, most of which will be in the U.S. Analysts expect the company to earn about 76 cents a share, according to First Call. In 2000, the company posted a loss of $75.9 million, or 43 cents a share, on revenue of $4.96 billion. Those results include a noncash charge in the new-media segment of about $19 million, or 11 cents a share, related to the impairment of hardware and software. In March, Blockbuster ended its exclusive services agreement with Enron Corp.'s Broadband Services unit, less than eight months after signing the 20-year pact. The agreement called for tens of millions of homes in the U.S. and Europe to be able to receive movies on demand from Blockbuster via Enron 's (ENE) high-speed telephone lines. Both companies now say they will pursue video-on-demand services on their own or with other partners. Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA: UPDATE 1-Enron India unit lenders to meet on April 23. 04/19/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, April 19 (Reuters) - U.S. energy giant Enron Corp's Indian unit has called a meeting of its lenders on April 23 to discuss the ongoing payment row with India's Maharashtra state government, a company spokesman said on Thursday. The meeting will be in London and will be attended by international as well as local lenders of the Dabhol Power Company (DPC), he added. Creditors have extended $1.2 billion in loans to finance construction of a second phase of the plant, which is expected to begin operating later this year, tripling the plant's power output. The move comes amid escalating tensions between Enron and Maharashtra over the inability of the state's utility to pay its monthly bills. The Maharashtra State Electricity Board (MSEB) has been defaulting on payments since October for electricity purchased from Dabhol's 740 MW power plant on the state's west coast. The amount outstanding totals 2.26 billion rupees ($48.24 million). In an effort to compel payment, Dabhol has twice invoked a federal government guarantee to cover payment defaults by the state utility. Last week, Dabhol also issued a notice of political force majeure to Maharashtra. Force majeure is an event beyond the control of a contractual party that could not have been prevented. The dispute has caused Enron to freeze most of its investment plans in India and has also affected foreign investment in India's power sector. "This meeting has been called to update the lenders about the situation," the DPC spokesman said. The Indian lenders likely to attend are the Industrial Development Bank of India , Industrial Finance Corporation of India , Canara Bank, State Bank of India and ICICI . The Business Standard newspaper reported that Maharashtra no longer intends to buy power produced by the second phase of the Dabhol project, which is nearing completion. The $1.86 billion addition will nearly triple the plant's output capacity to 2,184 MW. "As far as Maharashtra is concerned, phase two is as good as scrapped," the financial daily quoted the state chief minister Vilasrao Deshmukh as telling reporters in Bombay on Wednesday. The state government signed a contract in the mid-1990's to buy the plant's entire power output. But a rise in the cost of naphtha, the fuel currently used to power the plant, and a decline in the value of the Indian rupee against the dollar, has inflated the cost of the power produced by the Dabhol plant beyond the price expected at the time the contract. That has made the power produced by the Enron plant twice the cost of power produced by other suppliers in the state, fuelling popular and political pressure to scrap the contract. ($1=46.84 Indian rupees). Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Ends Gas Import, Marketing Venture With Romania's Petrom 2001-04-19 14:00 (New York) Enron Ends Gas Import, Marketing Venture With Romania's Petrom Bucharest, April 19 (Bloomberg) -- Enron Corp. withdrew from a venture with Romania's national oil company, SNP Petrom SA, after failing to gain access to the gas import pipeline, Petrom said. Enron Europe, a unit of the world's largest energy trader, set up Petrom-Enron Gas SRL three years ago to import natural gas to Romania and market Petrom's gas at home and abroad. ``Enron withdrew from the joint venture because they said they couldn't get access to Romania's natural gas import transportation system,'' Petrom spokesman Gabriel Nastase said in an interview. State-owned Transgaz, which operates the nation's natural gas pipeline, was not available for comment. Romania currently imports natural gas from Russia's OAO Gazprom through Wintershall AG, the oil and gas unit of BASF AG. Last year, Transgaz stopped gas imports from Ukraine, at that time Romania's other foreign supplier, after Gazprom charged that Ukraine was stealing gas from its pipeline that transits that country with the purpose of re-exporting it. Petrom, which produces more than 6 billion cubic meters of gas per year, accounting for as much as 42 percent of Romania's domestic gas production, will seek another domestic or foreign partner to market its gas, Nastase said. Enron will remain in Romania, said Bogdan Diaconu, Enron's representative. He would not detail reasons for withdrawing from the venture. --Bogdan Preda in Bucharest through the Warsaw newsroom (48-22) 520 6180/sjk Davis' gouging claims disputed Officials say no link between PG&E bankruptcy, high prices David Lazarus, Chronicle Staff Writer ? Thursday, April 19, 2001 Officials on the front lines of California's energy mess yesterday challenged Gov. Gray Davis' assertion that the state is being gouged by power companies because of PG&E's bankruptcy filing. Such dissent from the governor's own subordinates could make it harder for Davis to gain support for his energy measures in the state Legislature. Despite Davis' latest claims, the Department of Water Resources, which is spending about $70 million a day buying power, said there is no evidence linking recent price increases to Pacific Gas and Electric Co. filing for bankruptcy protection on April 6. "It is a seller's market," said Viju Patel, executive manager of the Department of Water Resources' power systems department. "The power companies do not need an excuse to raise prices." Critics say Davis' penchant for secrecy on energy issues has come back to haunt him at a time when he needs all the allies he can find. "People aren't taking his words at face value," said Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. Republican lawmakers -- and even some Democrats -- have challenged a number of the governor's initiatives, including a multibillion-dollar bailout scheme for Southern California Edison. Nevertheless, Davis reiterated his belief yesterday that recent electricity price increases are "an aberration driven by the bankruptcy of PG&E." He said California's spending on power jumped 40 percent in the week following PG&E's bankruptcy filing because generators say they face a greater risk of not being paid. "Nothing else in the equation has changed," said Steve Maviglio, a spokesman for the governor. "Everything is the same except the bankruptcy." However, power companies were quick to challenge this assertion. They insisted that PG&E's bankruptcy actually was seen as a positive development by those in the energy business. "If anything, PG&E provides some solace for traders because the bankruptcy provides an organized mechanism for recovery of payments," said Gary Ackerman, executive director of the Western Power Trading Forum, a Menlo Park energy- industry association. On the other hand, he acknowledged that power companies are becoming increasingly wary of the state of California's creditworthiness as an energy buyer. The Department of Water Resources already has spent nearly $5 billion buying electricity and has yet to recoup a dime from ratepayers. State regulators are still trying to come up with a way to apportion the limited revenues from power rates among the various parties in California's energy picture. Rating agency Fitch Inc. said yesterday it may cut the state's credit rating because of questions surrounding recovery of energy costs. "People are keeping an eye on things," Ackerman said. "They're watching how California finances things." If a premium on electricity sales to the state exists, he said it probably has been in place since the beginning of the year, well before PG&E's current woes. UCAN's Shames agreed. He said power companies added a "risk premium" to their California power sales late last year when it looked like the state's energy troubles were worsening. "PG&E's bankruptcy may have increased the uncertainty," Shames said, "but we've been paying a risk premium for months now." Richard Wheatley, a spokesman for Reliant Energy in Houston, insisted that his company's traders are not using questions about PG&E's or California's financial solvency as a fresh excuse for higher prices. "I haven't seen any evidence of it," he said. Mark Palmer, a spokesman for Houston's Enron Corp., laid blame for recent price increases on low rainfall throughout the West, which has cut output at hydroelectric facilities, as well as on California's chronic power shortage. "It's not that there's a premium on prices," he said. "It's just supply and demand." That said, Palmer acknowledged that California's firm insistance on blackouts being avoided at all costs leaves the state vulnerable to virtually any price generators choose to demand. "This means prices will be used to allocate a scarce resource," he said. "There's no other way it could work." Bottom line for consumers: It's going to be a long, hot summer, and electricity prices will soar even higher as demand surges. And despite the best efforts of state officials, a daily threat of blackouts remains a virtual certainty as California's beleaguered power grid is stretched to the breaking point. At the Department of Water Resources' command center in a Sacramento shopping mall, the state's team of electricity traders has moved onto a new, high-tech trading floor, where they negotiate power deals each day from the crack of dawn. The department's Patel said daily blackouts may be averted this summer after consumers see skyrocketing power prices reflected in their bills. "People will respond to these prices and they are going to conserve like never before," Patel predicted. E-mail David Lazarus at dlazarus@sfchronicle.com.
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