Shares in International Power surged in early trading, as the power producer formerly known as National Power reported a 44 per cent rise in profits and said that it was in talks to enter Russia's soon-to-be privatised electricity market

Chief executive Philip Cox said he had been holding talks with officials from Russia's state-owned electricity company UES, who are currently in the UK, about investing in the 120,000 megawatt power market.

“We have been to Russia; we’re viewing potential opportunities but very much on the learning curve,” he said. Privatisations are due to start within one or two years, he said.

Cox added that security and availability of fuel source is an important factor in Russia and something the group is looking at very closely at the moment.

The group, which owns power plants across the UK, US, Middle East and Asia, said that rising electricity prices and acquisitions helped to underpin the improvement in full year profits.

The shares were trading up 19.5p at 371.75p by 11am. The shares have fallen more than 10 per cent in recent days.

Philip Cox, chief executive, said: "A largely forward contracted position for our merchant market capacity gives us confidence that 2007 will be a year of further growth.”

He said that most of the output for this year and next year from its UK plants at Rugeley and Saltend had been sold at rates significantly above the current forward prices.

International Power said that profit from operations rose to £773 millions, ahead of the average City forecast.

The group spent £842 million on acquisitions last year.

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