THE ESB has recorded a strong operating performance, but a large exceptional charge relating to its restructuring under the Cost and Competitiveness Review meant it reported a loss of £284.1 million for last year.
Strong growth in the demand ford electricity and substantial costs savings contributed to a 33 per cent rise in operating profits at the ESB to a record £83.6 million.
The exceptional charges for the estimated cost of a three year restructuring package at the company came to £367.3 million, leading to a bottom line loss of £284.1 million.
The £367.3 million is the up front cost of implementing the Cost and Competition Review agreed between ESB management and unions, under which 2,000 people are expected to leave the company.
Presenting its annual results yesterday, ESB chairman, Mr Billy McCann, said he was "confident" there will be no further charges in future years to the group as a result of the CCR.
Its 1995 results show the company has set aside £244.9 million for lump sum payments and other costs agreed under the restructuring package. A further £122.4 million has been provided to meet its pension scheme contribution commitment to workers.
Mr McCann said the cost of the CCR represents a "very solid investment" on the basis of the ongoing savings it will achieve. When fully implemented, the ESB expects the CCR will deliver savings of up to £60 million a year for the company.
As part of the CCR the Government has already granted the ESB a 6.5 per cent rise in electricity prices to be spread over the next three years. When fully implemented it will bring in an extra £65 million. Residential customers are to face larger increases than the business sector.
Connecting 30,000 new customers last year the highest since the early 1980s the ESB has reported a 5 per cent increase in turnover to just over £1 billion.
Its revenue from electricity usage rose 4.3 per cent to £914 million last year. ESB's retail appliance and contracting business also showed good growth, with turnover up by 11.9 per cent to £54 million while its international subsidiary, ESBI contributing another £58 million to group turnover in 1995.
Higher fuel prices, due to underlying increases in the price of oil, coal and gas, pushed operating costs Up by 3.6 per cent to £871.1 million.
Despite wage increases of £6 mil lion to workers under the Programme for Competitiveness and Work, the ESB's payroll costs fell by £9 million to £256.4 million, due to falling staff numbers and general cut backs in overtime payments.
After the exceptional charges to the latest accounts, the ESB still shows a strong financial position, with a debt to equity ratio of 58 per cent. The company also further reduced its debt, more than 80 per cent of which is held in Irish pounds, by £112 million. Lower interest rates throughout the period cut its net interest payment cost by £1.7 million to £71.5 million.
Showing a strong financial position last year, even after exceptional charges, Mr Joe Moran, the chief executive, says he would be "greatly disappointed disappointed" if the company did not achieve annual operating profits of £120 million in the coming years.
