The directors declared an interim unfranked dividend of 2.6 cents per share - in line with the dividend for the first half of 1999-2000, the company said. Deutsche Bank said in a report that ENE is flagging cessation of dividend payments in order to free up capital to fund its growth options.

ENE said one of the highlights of the half was that it had increased world-wide operating capacity to 360 megawatts after bringing on additional 30 MW of power. The commissioning of Lorain County and Carbon Limestone in Ohio increased operating capacity in the US to 30 MW.

As for its household waste to renewable energy business (SWERF), the company said it can only move forward after it has successfully completed capacity testing at its Whytes Gully SWERF plant, which is being delayed due to technical glitches with the char gasifier.

Deutsche Bank in its report on ENE said that it expects technical issues to be an ongoing theme that will put nameplate testing back beyond mid-year. "We remain reluctant to move to a positive stance until the process is proven and maintain our Market Perform rating," Deutsche said.

Managing director of ENE, Mr Paul Whiteman said that while the timing of new projects has been influenced by delays with the char gasifier, there is still much interest from around the globe for new SWERF plants.

He added the company's subsidiary, Brightstar Environmental, has continued to successfully progress the marketing of the SWERF product to communities and local governments on three continents. Progress includes:

· Environmental impact assessment work to expand the Whytes Gully facility from an installed capacity of 50,000 tonne per annum (tpa) to 150,000 tpa;

· The development of the Derby project in the UK, a staged project of initially 50,000 tpa with potential to 200,000 tpa;

· Brightstar being named as "vendor of choice" for a project in Southern California with potential to 275,000 tpa to replace a landfill due for closure in 2004;

· In South West Florida the Company has been shortlisted in a tender process for a 150,000 tpa project, with potential expansion to 250,000 tpa;

· Contract finalisation work being progressed following the successful co-tender with Brett Waste Management for the 100,000 tpa contract with the Kent County Council in the UK; and

· In South Australia, the execution of the Waste Supply Agreement with the City of Salisbury awaits the finalisation of a site for the SWERF. Brightstar signed a Heads of Agreement with the City in October 2001. Subsequently, all key terms of the WSA have been finalised.

· Mr Whiteman said in addition, the market potential for Brightstar in New South Wales remained very strong with Brightstar actively engaged in a number of procurement processes in both metropolitan and regional areas.