Dynegy will take a second quarter pretax charge of half a billion dollars, more than previously expected, after the US energy trader revised natural gas sales figures.
The Houston based company had forecast $450 million, mostly for costs from its communications business and severance payments. The increase follows review of results in its gas marketing business, Dynegy said in a statement. The marketing charge alone will be about $125 million and comes as Dynegy and other traders face probes of their business practices.
Dynegy has asked its auditor, PricewaterhouseCoopers LLP, to re-audit financial statements for 1999 and 2000. The company expects it will take the rest of the year to complete the review, which may lead to a restatement of results for those years.
“There is really no reason to be an aggressive buyer of Dynegy now,” said Credit Lyonnais analyst Gordon Howald, “There is no way to get a good handle on what their fundamental financials are going to look like until year's end.”