Pre-tax profits at Bord Gais fell 12 per cent to £60 million (#76.18 million) last year as a result of a 47 per cent rise in the price of natural gas supplied to the company last year.

"As far as we are concerned this is strong result in a difficult market," Mr Gerry Walsh, chief executive, Bord Gais said at the publication yesterday of the company's annual report for 2000. "In general, our profit reflects a squeeze on the growth margin line, arising from the increase in costs and also an increase in our operating costs, reflecting the increased costs of doing more business."

Bord Gais chairman Dr Michael Conlon said the drop in profit also reflected the company's decision not to pass on the cost increases to its customers.

"Prices for our domestic customers remained static and are in fact 40 per cent below the European average," he said. "Furthermore, prices for industrial and commercial customers are among the most competitive in Europe, falling 23 per cent below the European average."

Bord Gais also paid a dividend of £22 million to the Exchequer. Turnover was up 16 per cent to £391 million, which the company said reflected continued strong demand for natural gas from both industrial/commercial users and from residential customers.

"There have been impressive sale performances in all markets. It is the largest increase in turnover we have experienced over the life of the company," said Mr Walsh.

Mr Walsh said borrowings, up £105 million on 1999, were lower than anticipated at £260 million and the company was well placed to continue its £1 billion investment programme.