ESB operating profit rises in 2021 despite market volatility

State energy group ESB said operating profit increased in 2021, despite ongoing volatility in the energy markets during the year.

Operating profit before exceptional items rose €63 million in the year ended December 31st, 2021, to reach €679 million. Profit after exceptional items, interest and tax was €191 million.

The company said the rise was down to a higher energy margin in its British generation business due to higher plant running and prices, positive foreign exchange movements, increased electricity demand and the timing of tariff changes in the networks business. It was offset by losses in the British business supply business as a result of increased wholesale energy prices and the government-imposed price cap. ESB said margins in its Irish generation and supply businesses were broadly in line with 2020.

A net exceptional charge of €63 million was incurred in 2021, comprising non-cash impairment charges on the Neart na Gaoithe Scottish offshore wind farm project and on its British supply business So Energy. Those charges were offset by the gains made of the sale of a 47 per cent stake in waste wood energy plant Tilbury Green Power and the sale of part of the redeveloped Fitzwilliam Street building in Dublin.

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Dividend payment

ESB's chief financial officer Pat Fenlon said the results were positive in light of the significant volatility in energy markets.

A dividend of €126 million for the year has been recommended, a rise of €81 million on 2020. ESB has paid €1.2 billion to the Irish exchequer in the past 10 years.

The year saw a capital investment of €1.2 billion in energy infrastructure. In February, the company said it would invest in a new strategy to reach net zero carbon emissions by 2040, spending up to €2 billion a year until the end of the decade to advance its plans to cut the carbon emitted to the atmosphere.

“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,” Mr Fenlon said.

“Delivering long-term value for the benefit of our customers, shareholders and the wider economy continues to be a key focus for ESB.”