Southern Company second-quarter earnings/SEI`s Boren retires

ATLANTA – Significantly higher earnings by Southern Company’s Southern Energy Inc. subsidiary helped boost the global energy company’s second-quarter net income by more than 16 percent, Chairman and Chief Executive Officer Bill Dahlberg announced today.

Southern Company earned $314 million or 45 cents a share in the second quarter of 1999, compared with $270 million or 39 cents a share for the comparable period a year earlier. Earnings for the 12 months ending June 30, 1999, were $1.0 billion or $1.44 a share, compared with $1.1 billion or $1.56 a share for the 12 months ending June 30, 1998. Year-to-date earnings were $538 million or 77 cents a share compared with $512 million or 74 cents a share for the same period in 1998. Click here for earnings highlights (PDF).

“Our strategy has been to expand our growth in the competitive energy supply business, and Southern Energy continues to help us do that successfully and profitably,” Dahlberg said.

Southern Energy, the subsidiary that includes Southern Company’s international operations and its competitive energy supply business, reported $69 million in second-quarter 1999 earnings, compared with $25 million for the same period last year. After adjusting for interest on inter-company debt, Southern Energy reported $77 million in earnings, compared with $35 million for the second quarter of 1998.

Southern Energy’s increased contribution to net income was due in large part to profits from significant new investments in power-generation businesses in New England and California, performance and growth of Southern Company Energy Marketing’s trading business and increased profitability from Southern Energy’s Asian business units.

In related news, Tom Boren, 50, president and chief executive officer of Southern Energy, has decided to take early retirement from Southern Company. Boren joined Southern Company in 1968 and has served in his current role since 1992.

“Tom Boren has been a great leader at Southern Company and he will be missed,” said Dahlberg. “We appreciate his contributions over his 31-year career with us. He brought Southern Energy along from its infancy to where it is today, one of the world’s largest independent power producers with assets of nearly $14 billion. With Tom’s aggressive guidance, he helped make Southern Company an international energy company.”

Dahlberg said Boren’s successor would be named in the near future.

The company’s retail business in the Southeast continued to produce solid operating results in the second quarter even though the region experienced mild springtime weather. Southern Company’s revenues for the second quarter of 1999 were $2.8 billion, compared with $2.9 billion in 1998’s second quarter. Southern Company’s board of directors today also approved a quarterly dividend of 33½ cents a share, payable Sept. 4, 1999, to shareholders of record Aug. 2, 1999. This marks the 207th consecutive quarter – dating back to 1948 – that Southern Company has paid a dividend to its shareholders.

In reviewing Southern Company’s second-quarter performance, Dahlberg noted, “Southern Energy’s results reflect the growing importance of our non-traditional business to Southern Company’s earnings.”

Reviewing operations, Dahlberg said electricity use by retail customers in Southern Company`s traditional service area in the southeastern United States decreased 0.6 percent to 67.9 billion kilowatt-hours during the first six months of 1999. In-home electricity needs were down 4.4 percent to 19.5 billion kilowatt-hours. Electricity consumption by commercial customers – offices, stores and other non-manufacturing firms – rose 4.1 percent to 20.4 billion kilowatt-hours. Industrial energy use decreased 1.2 percent to 27.5 billion kilowatt-hours.

Total sales of electricity to Southern Company’s customers in the Southeast, including sales to other utilities, decreased 2.9 percent to 77.5 billion kilowatt-hours for the first six months of 1999.

Hear management’s remarks about second-quarter performance, after 1 p.m. EDT July 20. A package of detailed financial information will be available at the same address July 19.

Southern Company (NYSE: SO) is an international energy company with more than $35 billion in assets through regional utilities and operations around the world. It is the largest producer of electricity in the United States and one of the world’s leading independent power producers. Based in Atlanta, Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Through its Southern Energy subsidiary, Southern Company supplies electricity in 10 countries on four continents and has a growing presence in North America with assets in the Northeast, the Midwest, California and Texas. Southern Company also provides energy-related marketing, trading and technical services in the United States and Europe and offers Southern LINC wireless telecommunications.