August 14, 2009 / 1:12 PM / 9 years ago

UPDATE 1-Canadian Hydro profit falls on higher expenses

* Q2 profit falls 99 percent to C$23,000

* Revenue 33 percent higher at C$26.15 million

OTTAWA, Aug 14 (Reuters) - Canadian Hydro Developers Inc KHD.TO posted a 99 percent drop in second-quarter profit on Friday on higher amortization and interest expenses from two big wind farms and smaller foreign exchange gains.

The renewable power company, the target of a hostile takeover bid from TransAlta Corp (TA.TO), said earnings fell to C$23,000 ($21,296), or nill per share, for the three months ending June 30. That compares with a profit of C$2.88 million, or 2 Canadian cents a share, a year earlier.

Revenue grew 33 percent to C$26.15 million from C$19.66 million.

    Analysts, on average, had forecast a profit of 1 Canadian cent a share and revenue of C$27.57 million, according to Reuters Estimates.

    The company said its amortization expense jumped 58 percent as it completed Melancthon 2 and Wolfe Island wind farms, which have a higher capital cost than existing plants.

    TransAlta, Canada’s biggest pure-play electricity company, made a C$4.55 per share, C$654 million offer for Canadian Hydro in July. Canadian Hydro is urging shareholders to reject the bid, saying it is inadequate. ($1=$1.08 Canadian) (Reporting by Susan Taylor, editing by Gerald E. McCormick)

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