Lower prices hit Bord Gáis profits

GAS prices have hit rock bottom but a hike this year is unlikely, according to Bord Gáis which yesterday poured cold water on any talk of privatisation.

The Cork-based company said yesterday pre-tax profits fell by €32 million last year to €119m, due in part to lower gas prices.

In 12 months Bord Gáis has lowered the price of gas three times and chief executive John Mullins said yesterday that although a price hike this year is unlikely, if there is one it will be “marginal”.

“I can’t see gas prices going lower than they are,” he said.

Despite the drop in profit the company maintained that it saw a strong performance in the year.

Profit in 2009 was also hit by the advancement of a substantial investment programme carried out at the firm. This included the acquisition of Cork-based SWS Natural Resources, one of the largest wind generators in Ireland, for €500m. This investment will see a major roll-out of wind farms between now and 2013.

Bord Gáis plans to create 500 jobs and will invest€3 billion over the next 10 years. The new jobs will be created in the wind energy sector and at customer service centres. It said that 350,000 customers have now switched to Bord Gáis for electricity.

Mr Mullins hit out at the delay in getting the Corrib gas project in Mayo online. He said that it is “vitally important” for Ireland that gas is flowing there in the next two years. Mr Mullins said that if this is not the case then by 2012 Bord Gáis will have to look to Scotland for security of supply.

He also stressed the importance of Bord Gáis as a “very significant state asset”.

On the restructuring issue he said talks are ongoing with the Government. It is seeking to have the independent company created, which would be a subsidiary of Bord Gáis that would operate the network division of the firm.

Under the EU’s third directive on competition in energy markets Bord Gáis needs to restructure its operations under a series of guidelines.

Reports have signalled that the Minister for Energy Eamon Ryan is to seek a partial break-up of Bord Gáis.

Mr Mullins said, however, that this restructuring process is in no way linked to a preparation for a possible privatisation.