900,000 ESB customers defect to rivals in 18 months
THE ESB lost 900,000 customers in 18 months as homeowners flocked to different providers, new figures show.
The customer drain will make it harder for the Government to sell a stake in the electricity provider and reduce the value of the company ahead of any privatisation.
Pre-tax profit at the state-owned electricity company has meanwhile slumped 40pc to €87.7m in the first half of 2011 as finance costs more than tripled and it continued to lose money on its slumping residential operations.
The losses were sustained during the tenure of former chief executive Padraig McManus who left earlier this year with a golden handshake worth €600,000 and a €200,000-a-year pension.
Staff at the utility earn far more than the national average and a simple calculation of payroll costs from the latest figures suggests an average annual ESB salary, excluding pension contributions, stood of €62,000 at the end of last June.
Electric Ireland, which serves the residential market, continued to lose money in the first half of last year.
It posted a €13.1m loss in the first six months of 2011 although this was an improvement on the €32.4m loss recorded in the first half of 2010. Sales at the division tumbled nearly 15pc in the first half of 2011 to €797.2m.
Electric Ireland had about 1.3 million domestic customers in the first half of 2011 compared to about 2.2 million in 2009. Group operating profit climbed nearly 21pc to €211.8m.
Overall, ESB sales remained relatively stable at €1.38bn in the first six months of last year compared to €1.35bn in the first half of 2010. However, this was achieved in part due to the contribution of €100m in revenue from Northern Ireland Electricity which the ESB acquired in late 2010 for £1.2bn (€1.4bn). It generated a €10.1m operating profit in the first half of 2011.
ESB's international division recorded a 52pc rise to €222.4m in the first six months of 2011 and a €95.6m operating profit.
A spokesman for the ESB said that it has faced stiff competition for its residential business since the market was completely deregulated last year.
He added that customer numbers have now stabilised. The company introduced a near 15pc price hike last October as it sought to combat higher international energy costs. Its fuel costs rose 2.2pc to €312m in the first half of 2011.
The spokesman also said that the group is continuing its drive to cut €140m in costs and shed 1,000 jobs from its workforce. Talks with unions on the plan broke down before Christmas.
The ESB spokesman said that it's hoped an agreement will be reached "as quickly as possible".
The ESB employs 6,900 people in the South and a further 1,100 staff in the North. About €60m of the planned €140m savings are slated to be secured from staff number reductions.