Underlying profits at British Energy, the UK's main nuclear operator, slumped by more than a quarter last year after problems with its ageing power stations continued to weigh on its performance.

A string of shutdowns and maintenance problems at the power stations, which cut 24 per cent of its capacity in the year, wiped 28 per cent off British Energy's underlying earnings, the nuclear generator revealed today.

The electricity generator, which is in discussions with several potential buyers, said that underlying earnings fell from £1.2 billion to £882 million in the year to the end of March. The company said the result was slightly better than forecast since the price of electricity jumped in the final quarter of the year as the soaring price of oil was passed on to domestic energy consumers.

Bill Coley, chief executive, is holding the dividend flat at 13.6p and said: "Despite disappointing financial performance, we have made good operational progress, with Sizewell B operating to world-class standards and some best-ever metrics being realised across the Advanced Gas Reactor fleet."

However, it was an unplanned shutdown at Sizewell B yesterday which contributed to a massive power cut for hundreds of thousands of householders across the country.

Sizewell B remains shut today. "At this point it seems to be related to an instrument problem - one of the instruments that measures steam flow, not any sort of issue with the plant itself - and we hope to see that instrument corrected and Sizewell returned to service shortly," Mr Coley said, adding that the power station should be back on line within days.

Total output for the year was flat at 58.4 terawatts as shutdowns at the group's troubled Hartlepool and Heysham reactors was made up for with extra generation from its coal-fired plant at Eggborough.

Hartlepool and Heysham 1 stations remain shut while the company tries to deal with a problem of corroding wires in the pressure wall that surrounds the reactors, and they will not return to service until towards the end of this year. Meanwhile, Hinckley Point B and Hunterston B had been shut to repair boilers and returned to service last year but are operating at 70 per cent or less of their full capacity.

The closures meant that the company lost 24 per cent of its nuclear capacity last year, compared with 23 per cent the previous year. As a result, the costs per megawatt hour generated rose from £27 to £30, while the sale price fell from £44.20 to £40.70.

British Energy shares dipped 13p to 724p in early trading.

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