ESB businesses generate €469m in profits

THE ESB’s businesses generated profits of €469 million last year, according to figures released yesterday.

The State-owned energy group’s annual accounts show that revenues rose by about 7 per cent to €2.9 billion from €2.7 billion.

Operating profits rose 30 per cent to €469 million in 2011 from €338 million the previous year.

Factoring in a €24 million contribution from a joint venture, and a €414 million charge for interest and other finance costs, the company ended the year with €78.7 million pre-tax profits, compared with an €89 million loss in 2010.

The State-owned energy company’s annual report, which was published yesterday, also shows that former chief executive Padraig McManus received a €99,400 payment in lieu of notice when he retired on November 30th.

The payment was the equivalent of three months’ salary and was in full and final settlement of his contract with the company, which originally called for a six-month payment in lieu of notice.

The company also paid him an €84,200 bonus which had been due to him since 2009. The report notes that, in line with Government policy, Mr McManus was not awarded any bonuses in 2010 and 2011.

He also took a 15 per cent pay cut overall and his basic salary was cut to €373,000 from €421,000. Including the bonus and notice payments, Mr McManus received just under €675,000 last year, compared with €529,000 in 2010.

The figures show that Northern Ireland Electricity, which the ESB bought in December 2010 for €1.2 billion, contributed €44 million to operating profits last year.

Group finance and commercial director Donal Flynn said this was in line with the group’s predictions when it bought the business.

The ESB had net debt of €4.3 billion at the end of 2011. Much of this is due to holders of bonds issued to finance network development and other capital expenditure at the group.

Mr Flynn said its earnings before interest, tax and write-offs come to €1.2 billion, which provides the group with adequate cover for its debts.

The group is recommending payment of a €72.5 million dividend to the State.

Chairman Lochlann Quinn said that including this payment, the ESB had paid more than €1 billion in dividends to its main shareholder, the State, over the last decade.

Cost cuts saved the group €70 million during the year. It is working through a long-term plan designed to deliver €280 million in annual savings. Mr Flynn said it has achieved €165 million in savings to date.

The ESB’s unions recently agreed to a plan to cut labour costs by €140 million. Chief executive Pat O’Doherty said yesterday this would deliver “significant staff reductions and cost savings”.