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Babcock Power takes A$90m hit

Babcock & Brown Power is facing the prospect of A$90m of write downs on its full year 2009 results, although it still expects earnings to meet previous expectations.

Australian energy generation investor Babcock & Brown Power is set to take a A$90 million (€52.5 million; $74 million) hit to its full year results.

The company said in an announcement to the Australian Securities Exchange that it expects a number of one-off items to force the A$90 million reduction in its EBITDA for 2009. However, Babcock said it still expects to achieve a normalised EBITDA of between A$260 and A$270 million, as the reduction will not impact the company's underlying performance.

The one-off items include increased provisioning for some onerous contracts held by Australian energy infrastructure company Alinta, which Babcock partly owns, and a number of intangible writedowns.

Babcock & Brown Power is currently in the process of undertaking an impairment test of all its assets, which it expects to conclude next week.

The company's portfolio has holdings in 12 operational power stations, with a combined capacity of 2,800 megawatts. The group is thought to have debts of around A$3 billion. In July Babcock & Brown Power's banking syndicate provided it with a debt waiver until September.

Babcock & Brown Power is a publicly-listed firm whose management company is wholly owned by the Babcock & Brown group.