ESB to pay exchequer €78 million dividend

EOIN BURKE-KENNEDY

The ESB generated a potential dividend of €78 million for the exchequer last year on the back of 94 per cent jump in profits.

The State-owned energy group’s annual report shows its businesses recorded profits of €194 million in 2012, up from €100 million the previous year.

The report shows revenues rose 10 per cent to €3.3 billion last year as more than 100,000 electricity customers and 80,000 gas customers switched to the ESB's energy retail arm, Electric Ireland .

The group's umbrella of businesses, which includes Northern Ireland Electricity, saw operating profits fall by 12 per cent to €415 million last year, however, reflecting an exceptional cost item of €161 million related to the company's voluntary redundancy scheme.

The ESB’s board said it was recommending a final dividend of 3.96 cent per unit of stock or €78.4 million, bringing total dividends over the last decade to almost ¤1 billion.

The report shows the ESB’s share of energey generation, on an all-island basis, was 48 per cent in 2012 while its share of the total supply business was 36 per cent.

The company said it had invested €765 million in infrastructure projects during 2012, included a €466 million upgrade of Ireland ’s transmission and distribution network designed to accommodate increases in wind generation and maintain the resilience of the network.

During the year, ESB said it raised €1.1 billion through the issue of bonds, predominantly to European investors, which will support its ongoing infrastructure investment programme.

The company noted that two prominent credit rating agencies Standard & Poors and Fitch had both recently upgraded their outlook rating for the ESB from negative to stable.

“This reflects ESB’s successful funding and robust financial performance, as well as Ireland’s overall progress,” it said.

ESB chairman Lochlann Quinn said the company had reported a "good set of financial results for 2012 in spite of a very challenging business environment".

“Increasing interconnection to Britain and the arrival of large European utilities in our home market are transforming the competitive landscape.”

Mr Quinn said a financially strong ESB could ensure “continued investment in important infrastructure in Ireland.”

Chief executive Pat O'Doherty said: “Many of our customers are experiencing considerable hardship and we continue to work sensitively with them to help them manage their bills, there was a reduction of 33 per cent in disconnections over the last two years.”

“The group business strategy positions ESB as Ireland’s foremost energy company competing successfully in the converging Ireland/Great Britain electricity market,” he said.