ESB doubles payout to State

The ESB has paid a dividend of €60m to the State for the first half of this year; double the amount it paid for the same period last year.

ESB doubles payout to State

The increase reflected an improved financial performance with post-tax profit for the period rising by €109m, year-on-year, to €173m; operating profit increasing by 3.5% to €297m and revenues increasing marginally to €1.69bn.

The jump in after-tax profit was aided by the non-recurrence of negative non-cash fair value movements on inflation-linked interest rate swaps reflected in the company’s 2016 interim results.

Additionally, there was a marginal decrease in net debt to €4.4bn, driven by positive earnings (on an EBITDA basis) and the continued weakness of sterling impacting the ESB’s sterling-denominated debt.

Meanwhile, the €60m payment brings to nearly €1.5bn the amount the ESB has paid to the State, in dividend terms, over the past ten years.

ESB Group finance director Pat Fenlon said the first half figures were a reflection of a strong operating performance “in the face of intense competition”.

“ESB continues to focus on delivering value and investing in critical long-term electricity infrastructure for the benefit of our customers, shareholders and the wider Irish economy, and this is enabled by maintaining a strong financial position,” he added.

The group — which contributes around €2bn per year to the Irish economy through dividends, investments, taxes and jobs — said it invested €303m in energy infrastructure and other investments during the six months to the end of June.

The first half performance was a bit of a mixed bag when broken down into the ESB’s five operating segments.

Profits at its generation and wholesale markets arm fell €24m, year-on-year, to €87m as a result of lower energy margins earned in the single electricity market.

There was also an €11m annualised fall in profits at the ESB’s retail arm, Electric Ireland, to €46m. This was due to the impact of a price reduction programme and lower customer numbers compared to the same period last year.

The ESB Networks division grew operating profits by €32m, due to higher regulated tariffs, to €181m; and lower operating costs helped a €4m jump in operating profit — to €19m — at Northern Ireland Electricity Networks.

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