ESB profits surge over 33% during 2023

The company's dividend to the State declined from €327m in 2022 to €220m last year. 

Profits at ESB increased by over 33% during 2023 to €868m due to increased earnings in its ESB Networks business as well as growing activity in Britain.

ESB said that its dividend to the State in 2023 was €220m down from €327m in 2022. In addition, €76m paid to the Irish State under the Government’s scheme to cap the revenue of certain electricity generators.

Chief financial officer for the ESB Paul Stapleton said wholesale energy prices remain “unpredictable and significantly higher than the levels seen prior to the energy crisis” in early 2022.

“These market conditions continued to influence ESB’s financial performance in 2023. While Electric Ireland has decreased prices in recent months, ESB is very mindful that high energy prices continue to pose challenges for the customers we serve,” he said.

ESB said that the increased level of profitability is required given the scale of capital investment being undertaken as well as the scale of ESB’s borrowings at over €7.7bn.

During 2023, ESB raised over €1.3bn in additional bonds.

According to the ESB, its operating profits increased from €639m in 2022 to €868m. The company said that its growth in profits reflects increased earnings in its networks business and growing activities in Britain which now account for 23% of its overall profits.

During 2023, the company’s energy and trading section made an operating profit of €730m with almost 40% coming from its British operations. This is down €44m on 2022 mainly due to the Irish Government’s scheme to cap market revenues, increased headcount and increased business development costs.

ESB Networks saw operating profit increase by €152m to €359m due primarily to higher regulated income which reflects growing investment in the network.

Operating profit at its Northern Ireland Electricity Networks’ (NIE Networks) grew €14m to €78m in 2023.

The company’s customer solutions divisions, which includes Electric Ireland, made an operating loss of €12m compared to a loss of €109m in 2022. This movement was substantially driven by improved performance in So Energy in Britain. After price reductions during the year, Electric Ireland’s profitability was lower than 2022.

Under competition rules, the ESB’s power generation side cannot subsidise the retail side of the business.

ESB said 2023 was the second year of “record levels of capital investment” by ESB in energy infrastructure.

“This investment is critical for the economy and for Ireland’s transition to a net zero energy system. The funding of our capital expenditure programme – forecasted at over €11 bn over the next five years – will require continued strong financial performance and further profit growth,” Mr Stapleton said.

Capital expenditure by ESB in 2023 increased by €334m to €1.7bn.

Greenhouse gas emissions from ESB’s electricity generation fell by almost 30% on 2022 levels, the company said.