Investment takes its toll as NTR profits fall 9%

A heavy programme of investment hit the bottom line at infrastructure operator NTR last year, pushing pre-tax profits down by 9.4 per cent to €15.4 million.

The company posted a 63 per cent growth in revenues, however, as it expanded across all elements of its business. When interest and overheads are excluded, operating profits rose by 42 per cent to €48.5 million.

NTR chief executive Mr Jim Barry said the company remained "in transition", with current investment unlikely to boost results until next year.

Profits fell by €1 million to €11.4 million in 2002 within NTR's roads business, which includes the operation of toll bridges at Dublin's West-Link and East-Link bridges.

Volume on the West-Link, where a second bridge is nearing completion, rose by 5 per cent, while toll income was 10 per cent higher at €37.2 million, in line with higher charges.

Continued disruption relating to the Port Tunnel caused traffic on the East-Link bridge to fall back by 3 per cent, but toll increases saw revenues rise by 2.7 per cent to €7.4 million.

The company has won a contract of up to three years to operate a new toll plaza due to open at Drogheda in May.

NTR is also competing for the construction of the Waterford bypass and a route between Drogheda and Dundalk.

Greenstar, NTR's 88.5 per cent-owned waste management arm, contributed €11.3 million to pre-tax profits last year, up from €10.9 million in 2002.

Mr Barry said Greenstar was "a great business" but called for greater efficiency in the planning and licensing process surrounding waste management.

He said the continued prevalence of illegal dumping acted as a disincentive for investment. NTR has plans to pump up to €50 million into waste management this year, through both infrastructural and acquisitive expansion.

NTR's renewable energy joint venture, Airtricity, logged losses of €3.1 million in 2002, a slight improvement on the €4.8 million pre-tax loss recorded in 2001. Mr Barry said new wind farms would probably account for expenditure of more than €100 million in 2003.

Celtic Anglian Water, the water services company in which NTR holds a 38.5 per cent stake, contributed a pre-tax profit of €712,000 in 2002.

Mr Barry said investment would continue over all existing divisions this year.

It is believed that the company will move into an internet-related area over coming months, although Mr Barry declined to offer details on the project.

He underlined the board's intention to retain NTR's private status until current expansion is completed.

"There is no need to go out and get equity," Mr Barry said.

The group has access to a five-year debt facility worth €162.5 million, of which just €63 million has been used.