Profits nearly double to €200m at ESB despite 'challenging' markets
Semi-state firm ESB made a profit of more than €200m in the first half of the year, almost double what it made in the same period last year.
The company's accounts for the six months to the end of June show that revenues increased by €62m to €1.7bn while operating profits were up by €10m to €337m. After-tax profit rose from €108.5m in the first half of 2014 to €201.3m.
The sharp increase in profitability was mainly attributable to a sharp drop in the group's cost of finance, such as borrowing charges. The net finance cost in the first half of 2015 was just under €100m compared to €251m in the first half of 2014.
This was due to a gain in the value of certain financial instruments, which had incurred a sizeable loss in 2014.
The accounts show that the firm made a €214m dividend payment to the Exchequer in January. This completes the special dividend programme of €400m agreed with the Government in 2012. It also brings the total dividends paid out by the ESB during the past ten years to almost €1.5bn. Chief executive Pat O'Doherty said that the company's results reflect a "solid performance" in the first half of the year." He also said that wholesale electricity markets were "challenging" due to low prices, adding that the ESB is delivering good value for customers and shareholders.
The accounts also show that the ESB made capital investment of €405m during the first half of the year, down by 10pc compared to the same period in 2014. The semi-state's capital expenditure has come under scrutiny in recent weeks after it made a submission to the Commission for Energy Regulation (CER) €3.2bn in capital expenditure over the next five years. This compares to the expected spend of €2.4bn from 2011 to 2015.
A spokesman for the ESB said that capital expenditure is used for purposes such as technical repairs and the connection of new networks. He added: "We have submitted a programme of necessary work to CER with an associated budget of €3.2bn to cover the next five years. This significant amount of capital expenditure is necessary from a safety and technical perspective and needs to be financed from borrowings or ESB profits."