Statoil lost almost €4m in 2005 as interest payments to parent rose

Statoil Ireland, the service station chain recently sold by its Norwegian parent to the Denis O'Brien-backed consortium Topaz for €285 million, lost almost €4 million last year, the latest figures show.

Accounts lodged with the Companies' Registration Office (CRO) for Statoil Ireland Ltd, which operated around 150 Irish service stations, show that it had sales of €1.3 billion in 2005, a 30 per cent increase on the €1 billion it turned over during the previous year.

But its operations generated a profit of €737,000, less than half the €1.5 million surplus it earned the previous year.

A sharp increase in interest payments on a loan to the company from its Norwegian parent left the company with a loss before tax of €3.9 million for the year, a 75 per cent increase on its 2004 shortfall of €2.3 million.

The interest charges increased to €4.3 million in 2005 from €3.4 million the previous year. The accounts state that the charge relates to a loan from its parent that was being repaid in instalments.

It was also hit with another €99,000 in finance costs in 2005, compared with a €59,000 gain under this heading the previous year.

Statoil recently agreed to sell the business to a private consortium, Topaz, whose backers include media and telecoms tycoon Denis O'Brien and Galway property developer, Gerry Barrett, for €285 million.

Topaz saw off competition from rival bidder Petrogas, and the business sold for €100 million more than its original estimated value. The Norwegian group is set to make a profit of €76 million from the sale.

The Competition Authority is reviewing the deal and has yet to give approval. Topaz last year bought Shell Ireland's service station network. If the monopolies watchdog gives the goahead for the Statoil purchase, Topaz will be the biggest motor fuels retailer in the country. Topaz was formed by Dublin venture capital boutique, Ion Equity.

Under the terms of the sale, Topaz inherited a €20 million shortfall in Statoil Ireland's employee pension fund from the vendor. Last month, staff sought assurances from both parties to the deal that their benefits would be safeguarded. The two companies said that they had made the "best possible" arrangements for the workers. The accounts show that the pension fund had a €17 million shortfall at the end of 2005.