TOTAL DIVIDENDS PAID TO IRISH EXCHEQUER OVER PAST DECADE OF ALMOST €1.5 BILLION
Highlights:
- Operating Profit – €552 million (€132 million decrease on 2013 excluding exceptional items)
- Capital Investment – €960 million (€135 million increase on 2013)
- Dividends – €318 million (including special dividends of €260 million)
- Operating Cost Savings – €270 million in recurring annual savings achieved since 2010
Profitability
ESB today published its Annual Report and financial statements for 2014, reporting operating profit of €552 million excluding exceptional items, a decrease of €132 million on 2013. The reduction in profits is driven by:
- Lower electricity wholesale prices due mainly to lower gas prices (€113 million),
- Significant storm repair costs incurred during the first half of the year (€25 million), and
- The impact on plant availability of essential maintenance and repair work in its Moneypoint coal plant (€15 million)
The impact of these factors is partly offset by cost savings and improvements in other income streams (€20 million).
Commenting on the results, ESB’s Chief Executive Pat O’Doherty said, “In the face of some challenges in 2014, these results reflect a solid performance across the Group. ESB continues to deliver value for its customers, its shareholders, and for the Irish economy, while maintaining its financial strength and credit rating.
The performance improvement programme embarked on by ESB in 2010 has delivered significant recurring savings across the business and has helped to offset the impact of lower margins in the generation business”.
Profit after tax was €215 million, a decrease of €295 million on 2013. This reflects the lower operating profit outlined above, in addition to a negative mark to market movement on inflation linked interest rate swaps of €245 million. This is a non-cash item which reflects the current low interest rate environment in the UK.
1
Shareholders
The dividend payment of €214 million in January 2015 completed the special dividend programme of €400 million agreed with the government in 2012. This brings the total dividends paid during the past ten years to almost €1.5 billion.
ESB delivered a Return on Capital Employed (ROCE) of 6.0% in 2014, lower than 2013 (7.5%), and in line with its European peers at 5.8%.
Customers
Electric Ireland, ESB’s supply business, decreased its electricity prices for all customers during the last quarter of 2014, and continues to develop competitive and innovative product offerings, including a new ‘Pay As You Go’ electricity product and a partnership with NEST offering customers the Nest Learning Thermostat
TM.
Electric Ireland has the highest customer satisfaction ratings (as measured by the CER) and the lowest average disconnection rate among the three main electricity suppliers for 2014.
Irish Economy
ESB invested c.€700 million in energy infrastructure across the island of Ireland during 2014.
ESB contributes over €2 billion annually to the Irish economy through dividends, investments, taxes and jobs. ESB provides significant employment both directly, with 7,200 employees, and indirectly through contractors and service providers.
ENDS
The ESB Annual Report and financial statements can be found at:
www.esb.ie/annualreport2014
An Irish Version of this press release can be found
here.
1 Certain financial instruments, including the inflation linked interest rate swaps referred to above, must have any movement in their market value recognised in the financial statements. In the case of interest rate swaps, such mark to market movements are driven by changes in market interest rates. The current low interest rate environment in the UK is the primary driver of the negative movement in the 2014 income statement. See note 6 to the financial statements for further detail.