Profits slashed at Bord na Mona on foot of wind energy plans
Published 20/07/2010 | 05:00
BORD na Mona, the State-owned peat company which is branching into wind energy and water management, said flooding, the weak pound and higher interest payments all conspired to slash profits last year.
Pre-tax profits fell 34pc to €12.9m in the 12 months to March, compared with the previous year. Sales dipped 4pc to €384m in the same period as oil prices dropped, affecting the value of sales.
"These figures reflect a very solid performance for Bord na Mona in a challenging business environment," said chief executive Gabriel D'Arcy, who was paid a total of €392,000 in salary and benefits last year.
Bord na Mona, which has been criticised in the past for destroying the country's bogs to make garden mulch and peat briquettes, is seeking to turn itself into a green energy company.
It has permission to build the country's largest onshore windfarm in Oweninny in Mayo, and last week won permission to build a smaller wind farm in Mount Lucas in Offaly.
The company expects to make a "significant" announcement on a new partner for the Oweninny plant in the near future, Mr D'Arcy said.
Bord na Mona raised $205m (€146m) in a private placing in the US last year and expects to invest the money in capital- intensive wind energy projects over the coming years. The money, currently sitting in a deposit account, is the main reason for the increase in interest payments and fall in profits this year, he added.
Bord na Mona's €50m garden products business suffered a blow as the value of sterling fell again the euro, making the company's peat more expensive for British gardeners, Mr D'Arcy said.
The chief executive did not comment directly on the Government's review of semi-state bodies which is looking at every state asset in advance of December's Budget. The review, which will be led by UCD academic Colm McCarthy, has not yet contacted Bord na Mona.
The Government owns 95pc of the company, with employees owning the rest.
The company's pension liabilities shrank to €20m by March from €45m the previous March as the value of bonds held by the scheme increased, and the world's financial markets improved.