INTEREST PAYMENT charges and the cost of plugging a €2 billion shortfall in its pension plan left the ESB with an €89 million loss at the end of last year, figures released yesterday show.
The State energy company’s annual report shows that its operations, which include generating and selling electricity, and trading and supplying natural gas, were profitable in 2010.
The group had revenues of €2.7 billion during the year, a 10 per cent fall on 2009. Operating profits were €338.7 million, down from €350 million.
However, the company took a charge of €338 million for a once- off contribution to its pension fund, and the net cost of servicing its €3.9 billion debt rose to €113 million from €77 million in 2009.
A €14.5 million contribution from joint ventures in Ireland, Britain and Spain helped offset this, but the State group ended the year with a pre-tax loss of €89 million and a loss for the year after tax of €84 million.
The group had pre-tax profits of €600 million in 2009, boosted in parted by a once-off gain of €265 million from the sale of a number of power plants to Spanish group, Endesa.
The group’s net debt increased to €3.9 billion from €2.2 billion during the year, mainly because of of borrowing to fund its purchase of Northern Ireland Electricity, which owns the North’s grid.
Under the terms of a deal with its unions approved by the board last October, the company agreed to contribute €638 million to its staff pension scheme over 12 years in a move designed to eliminate a €2 billion shortfall in the fund.
This resulted in the once-off €338 million charge to the 2010 accounts.
Under the deal’s terms, ESB workers agreed to a three-year pay freeze, changes to the system used to calculate their pension payments, and cutting a link that gave an increase to retirees every time the company’s salaries rose.
Chief executive Pádraig McManus said the deal would allow the company to eliminate the pension fund deficit.
The group’s net assets grew by 31 per cent last year to €12 billion from €9.5 billion. The company has agreed to pay a €77 million dividend to the Exchequer.
Chairman Lochlann Quinn said yesterday the results showed the company had managed to continue to contribute to the economy and to grow its asset base, despite the challenging environment.
The ESB’s market share fell to 42 per cent from 50 per cent. The energy regulator recently opened up the residential sector to full competition, liberalising the last element of the electricity market.
Along with the ESB, Bord Gáis and Airtricity compete for custom in the residential electricity market. The ESB recently entered the household natural gas market.
During the year, the company opened a new, 400MW power plant at Aghada in Cork harbour and boosted its wind generation capacity.
