Sunday 25 February 2018

Pre-tax profits at ESB rise four-fold after customers hit by price hike

Colm Kelpie

Colm Kelpie

PROFITS before tax at the ESB rose four-fold last year as the semi-state piled further price increases on hard-pressed households.

Annual results for 2012 show the company raked in profits of €327.6m in the same year that it hiked prices for customers by almost 6pc.

The profit was up from the €78.8m pre-tax profit made in 2011.

However, €161m was set aside last year to deal with the costs associated with job cuts at the company.

Profits after tax totalled €194m – of which €78m will be paid to the State by way of a dividend.

The group's energy retail business Electric Ireland returned to profitability during the year, with customer numbers increasing by 800,000 between electricity and gas.

Pat O'Doherty, ESB chief executive, said the ESB was attempting to work with struggling households, claiming the number of disconnections over the past two years had fallen by one-third.

But the company said no decision had been made on whether prices would rise again this year.

"Many of our customers are experiencing considerable hardship and we continue to work sensitively with them to help them manage their bills," Mr O'Doherty said.

Disconnections in Electric Ireland fell to about 7,000 last year.

Mr O'Doherty, appointed in December 2011, was paid €352,798 last year, including a salary of €295,000. He also receives a company car.

His salary is down from previous chief executive Padraig McManus, who was paid €674,887 in 2011.

The company added 5.9pc to its electricity prices in October, which lumped €64 on to the average annual electricity bill for a family. The company also said that gas prices would increase by 8.5pc.

Increase

It was the second year in a row that households faced a price increase going into the winter.

Chairman Lochlann Quinn hailed the results, claiming they showed an overall improvement in group performance for the year.

"This is important as a financially strong ESB can ensure continued investment in important infrastructure in Ireland."

Key results for 2012 include:

• Profit after tax of €194m, from which a dividend of €78m will be paid.

• €1.8bn spent in the Irish economy.

• €1.1bn of bonds issued to support infrastructure investment.

• Recurring annual savings of more than €200m under ESB's Performance Improvement Programme.

• Almost 1,000 staff have left the company since 2010, with €161m set aside for the voluntary severance arrangements.

• A total of 7,992 staff employed, down from 8,212 in 2011.

• €765m in infrastructure projects, of which €466m was used to upgrade electricity and transmission and distribution network.

• Pension liabilities of €722m.

Sinn Fein said the profits should have been used to ensure that prices fell and that disconnections were minimised.

Senator Trevor O Clochartaigh said: "Disconnections are widespread, and while Electric Ireland claims not to be as bad as other suppliers, there are still considerable levels of disconnections, because people simply cannot afford to pay their bills.

"At the same time, we see the Government allowing the top brass in the ESB to take home six-figure salaries."

Some of the ESB's assets are due to be sold off this year by the Government under the Newera unit of the NTMA.

The government target of raising €400m through the sell-off of power stations is being increased to ensure that some of the company's debt is paid off.

Irish Independent

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