ESB profits soar to €847m in 2022

ESB. Stock image: Frank McGrath

Donal O'Donovan, Caoimhe Gordon and Gabija Gataveckaite

The country's largest electricity supplier made a profit of €847m after imposing a succession of huge price hikes on households and business over the past year.

ESB reported an operating profit before exceptional items of €847m in 2022.

This marked a  sharp rise from €679m in 2021. This was attributed to the impact of higher wholesale prices in the ESB’s generation and trading businesses in Ireland and Great Britain.

It added that this profit was partly offset by losses in the customer solutions businesses, as well as lower levels of profitability in ESB and NIE Networks.

Meanwhile Public Expenditure and Reform Minister Paschal Donohoe has said that increased profits from the ESB will be used to pay for cost of living measures in Budget 2024.

He said the profits will see a dividend of over €300m to the State, which may be used for new cost of living measures, if they are deemed necessary, as part of the budget.

“The Government has already made clear that the measures that we are now in the process of implementing will be measures that will take us up to the budget,” he said.

“We will decide in the budgetary process whether any further measures will be needed for this year or for next year, but the funding that is being collected particularly through the windfall taxes that will be implemented this year, will be used to contribute to additional measures if the Government believes those additional measures are needed.”

Mr Donohoe said the ESB will make a profit this year similar to that in 2019, pre the war in Ukraine.

The Cabinet yesterday signed off on windfall taxes, the revenue of which which ministers have already committed will go towards cost of living measures.

“We don’t want to see any State entity, or indeed the private sector, join a higher level of profitability purely due to the higher pricing that is having such a serious effect on households and businesses,” he said.

In results published today, ESB said that its generation and supply businesses are required to operate separately so increased profits from its generation division cannot be used to subsidise its Electric Ireland business.

ESB's customer solutions business, which includes Electric Ireland, recorded an operating loss of €109m due to reduced energy margins last year.

The company, which has more than 8,000 employees, invested €1.4bn in energy infrastructure in 2022.

ESB, which is majority owned by the Irish Government, is now proposing a one-off enhanced dividend of €327m, up from €126m in 2021.

State owned power utility ESB owns Electric Ireland, the biggest supplier of power to homes and businesses.

It has faced fierce criticism after imposing a raft of price hikes on consumers and more recently for cutting rates charged to businesses but not ordinary households.

ESB-owned Electric Ireland has 1.1 million electricity customers and 150,000 gas customers.

Electric Ireland increased prices for households three times last year and twice in 2021. This meant the average cost of electricity has doubled for the typical household to around €2,000 a year.

Those price hikes mostly came against the background of global energy prices that were pushed up dramatically after Russia’s invasion of Ukraine and resulting sanctions created uncertainty around supplies. This year prices have dropped significantly on wholesale markets, as much as 80pc below the 2022 peaks, but not for households.

"Electric Ireland did not make any profit in its residential electricity supply business in Ireland last year as we returned more than €55 million through a €50 credit to each of our more than 1.1 million residential customers in December and increased our Hardship Fund to €5 million,” ESB chief financial officer Paul Stapleton said.

Energy Minister Eamon Ryan has called on suppliers to households to cut prices now that wholesale costs are falling.

The ESB, as a State utility, falls under Minister Ryan’s control, while TDs have indicated they'll want energy boss to explain last year's profits at a hearing of the Oireachtas Communications and Energy Committee.