Eastern lifts payout but holds prices

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Andrew Feinberg

White House Correspondent

EASTERN Electricity maintained the flow of high dividend increases from regional electricity companies with a 15 per cent rise. But unlike some others, it did not simultaneously announce further price cuts.

However, the company did say that 400 jobs would be lost in 1993/4 following a reorganisation of customer service activities. Eastern removed 1,100 from its distribution business payroll last year.

Pre-tax profits rose by 28 per cent to pounds 183.4m in the year to 31 March. Earnings rose by 30 per cent, so Eastern's dividend cover, which was lower than most at privatisation, has risen from 2.3 to 2.6 times.

The main reason for the improvement in results was a turnaround from losses of pounds 9.4m to a profit of pounds 31.4m in higher voltage electricity supply business.

This was helped by the recovery of pounds 16.9m of previous undercharging, under the industry's price regulatory controls.

In March, Eastern froze its tariff for customers for the current year and also announced a pounds 5 'efficiency bonus' for its franchise customers - equivalent to 1.7 per cent of average bills. But Eastern has no immediate plans to announce further rebates.

James Smith, chairman and chief executive, said that last year Eastern had the lowest tariff of any regional electricity company.

He added that benefits from lower fuel purchasing costs resulting from cheaper coal prices would be automatically passed on to customers in the future.