ESB profits soar in first six months of the year amid rising prices – The Irish Times

Earnings at ESB rose in the six months to the end of June amid rising energy prices.

Earnings, including a one-time gain from what it called “exceptional volatility” in global commodity markets, jumped to 390.3 million euros from 128.4 million euros last year.

The group reported revenues of approximately 3.7 billion euros, which was up from around 2.2 billion euros in the previous year.

“The Russian invasion of Ukraine has had, and will continue to have, a significant impact on ESB’s markets and business lines,” the group said. “Electricity and natural gas prices remain high and volatile, which has resulted in a number of suppliers leaving markets in Ireland and Britain, as well as higher prices for end customers,” she added.

Energy prices in Ireland have risen in recent months, with consumer bills skyrocketing, exacerbating the cost of living crisis. ESB-owned Irish electricity company raised its unit prices by 11.35 per cent for electricity and 31.9 per cent for gas last month, less than three months after the last big price hike in May. It has announced three price increases so far this year.

The company recorded a so-called non-cash fair value gain of 161.7 million euros, up from 20.7 million euros in the previous year, driven by higher energy prices in global markets.

“The gains arose as a result of the increase in the futures market prices of these commodities in relation to the contracted prices,” she said.

“Fair value gains for the period are presented separately as an exceptional item due to its size and the fact that it does not represent the underlying performance during the period.”

Earnings before interest, tax, depreciation and amortization were €925 million, which was up from €742 million year-over-year.

Total comprehensive income for the financial period was 566.2 million euros, more than double the previous year’s 259.3 million euros. Total staff-related costs increased slightly from €256.2 million to €266.5 million.

The group noted that “consumer price inflation expectations have also been revised upwards due to additional increases in energy prices along with evidence of upward price pressures for other goods and services.”

ESB has a “strong balance sheet” with net assets of €4.6 billion. It said it “continues to generate strong operating profit” and maintains a “sound liquidity position” of just under 2.6 billion euros.

The company said its generation and supply business is required to operate separately, so the increased profits from ESB’s generation business cannot be used to offset the costs incurred by Electric Ireland.

Geraldine Heffy, chief financial officer of ESB, said: “Volatile and higher wholesale market prices will continue to be a feature of energy markets in 2022.

In the first six months of 2022, ESB generated an operating profit before exceptional items of €357 million and a capital investment of €532 million.

Excluding exceptional items, the company reported a profit of 248.8 million euros, up from 167.4 million euros in the previous year.

ESB Networks’ capex of €348 million was up €59 million over the previous year, mainly due to increased spending on the smart meter program as well as distribution and transmission network projects.

The introduction of smart meters continued in the Republic, as more than 850 thousand meters were installed by the end of June.

ESB had a 31 per cent share of the generation in the all island market during the period, and a 41 per cent share of the electricity supply in the all island market via Electric Ireland.

ESB Networks owns the distribution and transmission networks in the Republic, while its Northern Ireland Electricity Networks owns the distribution and transmission networks north of the border.