Esso back in black as pre-tax profits hit €18m

ESSO Ireland made its first profit for three years in 2006 helped by the sale of some of its filling stations.

The company, owned by American oil giant ExxonMobil, made a pre-tax profit of €18 million in 2006 reversing a loss of €11.9m in 2005.

At operating level, which excludes the gains on the sale of some of its forecourts, profits were €3.7m compared to a loss of €13.05m in 2005,accounts just filed at the Companies Registration Office reveal.

The operating profit reflected higher turnover and a reduction in distribution costs from €47.2m to €41.2m and from a cut in administrative expenses — down to €3.4m from €4.3m.

The company said in a note with the accounts: “During 2006 gross profit improved mainly driven by an improvement in marketing margins.

“This was partly offset by some reduction in sales volumes in the industrial sector due to competitive pressure. The company continued to review its portfolio of retail sites and to divest where appropriate,” it said.

Five sites were sold off during the year, adding €14m to annualprofits.

Gross turnover for the yearincrease to €980.7m from €932.5m in 2005. When the Government’s take fromexcise duty and VAT are excluded, turnover was up from €514.1m to €565.3m.

The profit margin at operating level fromEsso’s petrol business would equates to less than 1% in 2006.

On the cost side, a reduction in staff numbers helped. The wages bill for the year dropped to €3.4m from €5.9m.

According to the accounts, Esso pumped an additional €11.5m into its staff pension fund to reduce the deficit that had accrued. As result of this and an improved return on the assets in the fund, the deficit fell to €3.6m from €33.2m in 2005.

Despite the return to profits, Esso did not pay its parent company a dividend during the year.