Bord Gais glows with £82m profit

SUBURBAN roads ripped open to accommodate miles of spaghetti-like yellow piping is an all too familiar inconvenience for motorists but a golden earnings conduit for Bord Gais Eireann. Heavy promotion of the benefits of natural gas helped the State company connect an additional 17,000 customers to the national grid last year, increasing the number of residential customers to 258,000. Usage by the commercial and industrial sector added 13 per cent to volume sales with 9,207 heavy-duty users on the system.

Despite £43 million infrastructural investment last year natural gas is a profitable business, enveloping both Bord Gais' accounts and its chairman and chief executive in a warm glow. Press advertisements this week extolling the company's excellent financial performance feature the two executives encompassed by a beatific halo-like aura, symbolising both warmth and contentment. And why not. Pre-tax profits last year surged 22 per cent to £82 million, giving the company a return on capital employed of 19 per cent, a rate commensurate with some of the country's top industrial companies. With a colder winter than usual gas consumption increased 13 per cent last year, lifting sales volumes 14 per cent to £271 million.

Despite hefty expenditures Bord Gais managed to trim its borrowings by £59 million to £149 million and further swell exchequer revenues with a £9 million dividend contribution, an annual payment expected to rise to £26 million this year. For the user public comes the reiteration of assurances that residential gas prices, although not consumers, will remain frozen until the year 2000.

As with most successful, cash-generating State companies there has been loose talk of privatisation. However, the chairman, Michael Conlon, in unveiling the excellent set of annual results this week, played down the successes in his contention that the gas industry is presently "not viable". Privatisation of gas would not arise, "if it arises at all" until the end of 1999 when the business may be deemed viable. Potential private shareholders may have to remain out in the cold for some time yet.