Business Irish

Saturday 24 February 2018

Bad weather could knock €20m off Bord na Mona's bottom line

Bord Na Móna yesterday announced its annual results for the last year (ending march 2012). Pictured at the announcement yesterday (Mon) was Group CEO Gabriel D'Arcy and on right Chairman Fergus McArdle.
Bord Na Móna yesterday announced its annual results for the last year (ending march 2012). Pictured at the announcement yesterday (Mon) was Group CEO Gabriel D'Arcy and on right Chairman Fergus McArdle.
John Mulligan

John Mulligan

Only 22pc of peat harvest completed when the figure should be closer to 60pc

This summer's persistent bad weather could knock €20m off Bord na Mona's bottom line in its current financial year, managing director Gabriel D'Arcy has warned.

Speaking to the Irish Independent as the semi-state company reported a pre-tax loss of almost €2.9m for its last financial year, Mr D'Arcy said that the company currently has about 22pc of its expected annual peat harvest completed.

Usually by this time of the year, the figure would be closer to 60pc. He said between €10m and €20m could come off its bottom line this year.

"It's a risk. We have direct costs that are there whether we harvest or not," he said.

He added that he's hopeful a better spell of weather would enable the group to quickly boost its harvesting activity.

Mr D'Arcy insisted that even if the company didn't manage to achieve this year's harvesting targets, there would be no impact on the prices consumers might pay for electricity.

Revenue at Bord na Mona in the 12 months to the end of March this year was virtually unchanged at €383.8m.

Earnings before interest, tax, depreciation and amortisation fell 15.9pc to €61.1m. The group said that was largely due to the planned five-month closure of the ESB-owned West Offaly power station for a refit and rescued fuel sales as a result of a record mild winter.

Waste

Bord na Mona also wrote €23.1m off the value of its AES waste business. That brings the total non-cash impairment of the unit to around €32m since it was acquired in 2007.

Mr D'Arcy said that while AES increased its turnover from about €56m to €65.5m in the last financial year, it's been hampered by the general difficulties in the waste industry here.

That includes significant increases in levies imposed on waste headed for landfills, lower volumes of waste being generated, and the continuing operation of unlicensed storage premises for instance, according to Mr D'Arcy. He said the entire waste sector in Ireland was in a "terrible state".

Bord na Mona, which paid a €4.3m dividend to the State in the last financial year, is also planning to spend €160m on two windfarms in the midlands that will between them generate 120 megawatts of electricity.

The company is close to completing the procurement process for the windfarms and they should be operational within 24 months.

Mr D'Arcy said that Bord na Mona envisaged that its 200,000 acre landbank -- most of it in the midlands -- could be used to generate about 1.5 gigawatts of power that could be available for export to the UK.

However, he said that a number of hurdles including inter-governmental agreements needed to be in place before any such development could begin.

The managing director said the group had also experienced a strong start to the current financial year, with sales up 25pc in the first quarter and profits up even higher.

Irish Independent

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