London, 27 July (Argus) — Austrian utility Verbund announced today that it plans to boost its domestic and foreign production portfolio, after it published a sharp loss in its interim report.

The utility is constructing domestic power plants worth €1.3bn with a focus on expanding its hydroelectric portfolio. Further projects amounting to €1.4bn are planned in the near to mid-term.

The company had previously announced that it will use a €1bn capital increase, planned for the later this year, primarily to fund new hydroelectric plants.

Verbund will also strengthen its portfolio in key markets Turkey, Italy and France. In Turkey, the utility has a 50pc stake in local energy provider Enerjisa, which recently submitted bids for two electricity distribution grids.

“We are currently constructing eight power plants in Turkey through joint ventures, all of which are progressing in accordance with our business plan,” a company representative told Argus.

A 920MW gas-fired plant in Bandirma will become operational this year, while six hydropower plants and one wind farm will be commissioned between 2011 and 2013.

Enerjisa plans to increase its production portfolio from 455MW now to 5,000MW by 2015.

Verbund published disappointing interim results, with sales revenues shrinking by 5.1pc and operating profit falling by 28.4pc over the previous year.

The company attributes the losses to lower production from its hydroelectric plants caused by below-average water supply from Austrian rivers and relatively low European wholesale power prices.

“Power prices in Europe have recovered somewhat recently, but are still at a relatively low level. And we will only benefit from the positive effects of a lasting recovery in a later period because of our hedging strategy,” the utility said.

The utility is selling 75-80pc of its future power production one year in advance.

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