Bord na Móna posts pretax loss of €2.9m after AES write-down

BORD NA Móna yesterday announced a pretax loss of €2.9 million for last year, after writing down the value of its waste business, AES, by €23 million.

Gabriel D’Arcy, chief executive of the semi-State body, said the write-down reflected a contraction in the waste market generally, as well as the impact of landfill levies.

Bord na Móna, which has been diversifying away from peat production in recent years, bought AES in 2007 for €61 million.

Mr D’Arcy said that while “the timing was wrong”, the “strategic rationale” behind the acquisition remains in place, pointing out that Bord na Móna utilises large quantities of waste in other parts of its business, such as compost production. Mr D’Arcy said the company had no plans to put AES on the market. Revenue at the semi-State body increased fractionally last year to €383.8 million, compared to €382 million in its 2010-2011 financial year, the company’s annual report shows. AES accounts for about 17 per cent of Bord na Móna’s overall revenue.

Earnings before interest, tax, depreciation and amortisation (Ebitda) were down by almost 16 per cent to €61.1 million, primarily reflecting the five-month closure of the west Offaly power station last year, as well as reduced fuel sales due to mild weather. The ESB closed the power plant in Shannonbridge last year for a planned refit. According to Mr D’Arcy, the first quarter of the financial year has been ahead of expectations, with revenues up 25 per cent.

This reflected the full resumption of business at Shannonbridge and strong demand for Bord na Móna’s retail heating products, he said.

Bord na Móna, established in 1946, is one of the largest landowners in the State. It owns 80,000 hectares of land, mainly in the midlands. It has shifted its focus from peat production to other mainly energy-related markets such as electricity and wind.

The company recently began constructing two wind farm projects which will bring about 120 megawatts of wind energy on to the national grid over the next two years. It has also sought expressions of interest from companies looking to erect mobile communications networks on its land.

Bord na Móna employs more than 2,100 people. It is currently involved in an ongoing pay dispute with employees, which has been referred to the Labour Court.

The announcement of the €23 million write-down in AES comes as the Government prepares to announce a major reform of the waste-management industry today.