Profits at Esso slip to €3m for 2008

FUEL RETAILER Esso Ireland saw its profits fall to €3 million last year, down from more than €5 million in 2007, as increased competition resulted in lower margins at the group and an operating loss.

In documents filed at the Companies Office, the firm said the higher cost of fuel in 2008 increased costs, sales and turnover. But gross profit fell because competitive pressures eroded marketing margins.

Turnover at Esso Ireland soared 42 per cent to €838 million in 2008, a year that saw sharp volatility in crude oil prices on global commodity markets.

However, the higher cost of sales left gross profits reduced. Distribution costs and administrative expenses left the company with an operating loss of €5.9 million, compared to a profit of €2 million the year before.

But the operating loss was pushed into profit by a €7.1 million gain on the disposal of fixed assets, according to the company accounts.

The average number of staff employed by the company during 2008 was 28, down from 38 in 2007.

This led to a significant reduction in staff costs, which fell 39 per cent to almost €4.5 million.

The actuarial loss on Esso Ireland’s pension plan was €55.8 million, while the company paid tax of €1.25 million for the year. Its Irish assets are valued at €142.6 million, the accounts indicate.

Esso Ireland is a subsidiary of Esso Holding Co (UK). Esso’s ultimate holding company is Exxon Mobil, the largest oil company in the world.

The exploration giant saw its net income reduce by 66 per cent to €2.8 billion last year as the spike in oil prices unwound.