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ESB generates strong returns

Friday, June 01 14:37:51

The ESB turned in a strong financial performance in 2011 with operating profit increasing to E469million on total revenues of E2,995million. The State-owned electricity company intends to pay a E72.5m dividend to the State bringing total dividends paid to the Exchequer over the last decade close to E1billion.

Despite the economic difficulties nationally and internationally ESB raised a total of E1.3billion in the money markets in 2011 to fund an investment programme of almost E1billion per year, most of it in critical energy infrastructure in Ireland, ESB Chairman, Lochlann Quinn said.

Market conditions during 2011 continued to be challenging with electricity demand slow to recover to the high levels seen in 2008 when revenues of E3.5bn were generated. In fact the economic slowdown and lower disposable income resulted in a 3pc fall in electricity demand from the ESB in 2011.

ESB Chief Executive, Pat O'Doherty confirmed that while the economic downturn has presented "significant challenges in terms of customer arrears management, the company was very conscious of the rise in the number of customers, both residential and business, who are experiencing financial difficulty".

"Reflecting the fact that many of our customers are experiencing serious hardship, Electric Ireland has introduced new competitive pricing plans into the market and facilitated easier payment arrangements for our customers, with over 300,000 customers currently availing of these plans.

"We are also promoting pay-as-you-go meters for those in most difficulty and are continuing to promote energy efficiency through awareness campaigns and energy saving products," Pat O'Doherty said.

Looking forward, Pat O'Doherty said he expects progress to be made in 2012 on the removal of the remaining ring-fencing restrictions which currently prevent the integration of the company's generation and supply businesses.

He also highlighted the emerging regional electricity market when ESB will be in direct competition with large European utilities.

"In these challenging times it is absolutely fundamental that we maintain the financial strength of ESB so that we can continue to play a vital role in delivering critical infrastructure and economic stimulus to Ireland," he added.

"ESB is meeting the challenge by focusing on reducing costs and maintaining the strength of our balance sheet, which is crucial for future investment and growth," ESB chairman Lochlainn Quinn added.

A further E70million in cost reductions were delivered during 2011 under the Performance Improvement Programme which brings the total savings delivered to date under this programme to E165million involving an integrated package of earnings reductions and reductions in staff numbers. This means that the company has now secured almost 60pc of the overall cost reduction target of E280million to be delivered by 2015, the ESB said.