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Irish Independent
Irish Independent
Sarah Collins

ESB to pay dividend to State on back of rising profits

ESB crews restore power to homes in Lisdoonvarna, Co Clare. Picture: PA

State-owned ESB booked a €679m operating profit in 2021 and said it will pay a €126m dividend back to the Government.

The results mark an increase of €63m on 2020 operating profits – before tax, interest and exceptional charges – ESB said in its annual report for 2021. Profit after tax, interest and exceptional items came in at €191m in 2021, up from €126m in 2020.

The €126m dividend is up from the €81m ESB paid in 2020, bringing dividends paid back to the Irish exchequer to €1.2bn over the last decade.

ESB invested €1.2bn in infrastructure last year, including renewable generation.

Net assets were more than €4.1bn at the end of December 2021.

The increase in profit reflects a higher energy margin in ESB’s British business, positive foreign exchange movements, increased electricity demand and the timing of tariff changes in its networks business.

However, soaring wholesale energy prices and a UK energy price cap led to losses in ESB’s British supply business.

Republic of Ireland customers saw residential electric tariffs rise by 19pc in 2021 after Electric Ireland, ESB’s retail business, raised prices twice last year.

ESB chairman Terence O’Rourke said the rise was due to “volatility” and “tightness” in energy markets, and that the board was “very conscious of the impact that the increases have for all our customers”.

In its annual report, ESB also pointed to increasing geopolitical risks, including “growing political tensions between Russia and Ukraine, constrained and vulnerable gas supplies”.

“Threats to energy security became more salient,” the report said.

Key focus areas for 2022 are likely to include gas supply, the impact of inflation on the business and the approach to addressing market volatility, the report said.

“In the context of the significant volatility in the energy markets, ESB delivered a positive set of financial results in 2021,” chief financial officer Pat Fenlon said.

“In line with our 2040 Net Zero Strategy, which is aligned with the Irish Government’s Climate Action Plan, ESB continues to significantly invest in energy infrastructure to decarbonise electricity, improve resilience and empower customers. Delivering long-term value for the benefit of our customers, shareholders and the wider economy continues to be a key focus for ESB.”

The State holds a 96.5pc majority stake in ESB, with the remaining 3.5pc held by in an employee share-ownership plan.

ESB has a 33pc share of the all-island electricity generation market and 40pc of the supply market, with more than 1.9 million customers.

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