WASHINGTON (dpa-AFX) - Electric utility Dynegy Inc. (DYN), which is in the process of restructuring its de-consolidated Dynegy Holdings unit, reported a narrower loss for its first quarter on high capacity generation, despite a sharp decline in revenues.
President and Chief Executive Officer Robert Flexon said, 'Our operating performance for the first quarter 2012 achieved significantly higher capacity factors in a particularly difficult commodity environment along with weaker demand resulting from unusually warm winter weather.'
For its first quarter, net loss was $58 million or $0.47 per share, narrower than $77 million or $0.64 per share last year.
Dynegy Holdings, LLC and its wholly owned subsidiaries filed for bankruptcy protection as of November 7 last year. In December, the company filed a proposed Plan of Reorganization for the unit with the United States Bankruptcy Court for the Southern District of New York.
The latest quarter results were from its consolidated operations, including Dynegy Inc. and the Coal segment, while prior year's results included all segments. In the first quarter, mark-to-market gains of $30 million were partly offset by restructuring costs of $14 million.
On average, two analysts polled by Thomson Reuters expected the company to report loss of $0.71 per share. Analysts' estimates typically exclude special items.
Revenues declined to $177 million from $505 million in the prior-year quarter, while analysts were looking for $323.55 million. This was despite a 27 percent increase in generation volumes driven by a 128 percent increase in Gas segment generation.
Operating income for the gas segment, adjusted to remove the impact of deconsolidation, increased to $19 million from $13 million last year on more than doubled generation volumes.
'Our gas fleet ran at historically high capacity factors and had the highest generation levels in over a decade due to coal-to-gas generation switching while our Illinois-based coal fleet generation declined slightly with the unseasonably mild weather,' Flexon added.
In Dynegy Northeast Segment, lower prices caused the plants to be uneconomical for a significant portion of the quarter, leading to an 82 percent decline in generation volumes and a 95 percent decrease in gross margin, the company noted.
Regarding the ongoing restructuring efforts for its unit, the company said it has reached a settlement with major creditors that was filed with the bankruptcy court on May 1.
The company also entered in to a Plan Support Agreement, which envisions a significantly stronger balance sheet for the firm upon completion of the restructuring. Following this agreement, significant creditor groups agreed to support revised Dynegy Holdings Plan of Reorganization.
Following the process, the company will have reduced debt and lease obligations by over $4 billion and expects net debt at completion of the restructuring to be approximately $600 million.
A hearing on the settlement agreement, which requires bankruptcy court approval, has been scheduled for June 1.
The Plan Support Agreement contemplates the filing of a revised Plan and Disclosure Statement by May 30 and the completion of the restructuring by September 28, 2012.
Dynegy shares closed Wednesday's regular trading at $0.3835.
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© 2012 AFX News
