GLASGOW, Scotland — (Bloomberg News) — The $10.7 billion purchase of PacifiCorp, Utah Power's holding company, contributed to ScottishPower's fiscal first-half profit falling 10 percent.
ScottishPower said Thursday that net income for the six months ended Sept. 30 fell to $171 million, compared with $191 million in the same period a year ago. Sales rose 82 percent to $3.9 billion.
The Scotland-based utility, the largest in the United Kingdom, has expanded through acquisitions and last year became the first foreign company to buy a U.S. electric utility when it acquired PacifiCorp. The purchase added $170 million to pretax profit in the first half.
"PacifiCorp is going quite well," said Angelos Anastasiou, an analyst at Williams de Broe in London, who has a "hold" rating on the shares. "They're coping — albeit with reduced profitability — with United Kingdom price controls."
The company, which took a $172 million charge to integrate PacifiCorp in a plan that includes firing 1,600 workers, said pretax profit before certain items rose 12 percent to $386 million.
ScottishPower said it sees annual gains of $55 million in annual sales from price increases PacifiCorp obtained from California regulators before the acquisition.
U.K. regulatory changes also hurt ScottishPower profit, the company said. ScottishPower said it's fighting the drop in U.K. profit imposed by regulatory price cuts by expanding into other services like natural gas and telecommunications.
Ian Robinson, 57, has been CEO since 1995 and said Monday he'll retire from the company in April and be replaced by Ian Russell, a former finance director at the company who became deputy chief executive in December last year.