Pre-tax profits at Bord Gáis rose by 15 per cent to €118 million in 2004 as the number of natural gas customers exceeded 500,000 for the first time.

Turnover at the State-owned company was up 8 per cent at €755 million, with additional electricity business making a strong contribution to this. Bord Gáis is proposing to pay a dividend to the Government of €10 million for 2004.

The company's long term objective of becoming a "dual energy provider" (offering gas and electricity) advanced considerably in 2004, said a statement. It now has 7 per cent of the electricity market, although it is still looking for its own generation capacity.

With some long term gas contracts due to expire over the next few years, prices may have to increase. Gerry Walsh, the company's chief executive, told The Irish Times the wholesale market for gas was very volatile, but the company had no price increase application before the energy regulator at present.

He said Irish residential gas prices remained 19 per cent below the EU average.

The company is currently investing €1 billion developing the natural gas network in Ireland. But chairman Ed O'Connell also emphasised the increasing importance of its electricity business.

"Bord Gáis has now become a dual energy provider in an increasingly competitive market and we believe we are well positioned for future growth through electricity and expansion of our Northern Ireland business."

At the residential level Bord Gáis remains the dominant player, adding 38,000 new customers in 2004. The residential market opens fully to competition in October.

The total remuneration package of chief executive Gerry Walsh, according to the annual report, rose from €285,000 to €302,000. Wages and salary costs generally were up slightly from €38 million to €39.8 million.

The company's operating costs increased in 2004 from €118 million to €130 million, mainly because of higher operations and maintenance costs. The company employs 694 staff.