Bord Gáis Éireann's Annual Report and Financial Statements for 2013 show a strong operating performance across its businesses.
July 16, 2014:
Bord Gáis Éireann's Annual Report and Financial Statements for 2013 show a strong operating performance across its businesses. Profit before income tax for total operations increased by 44% (€52 million) to €171 million and EBITDA grew by €58 million to €437 million for the year.
The Company generated €458 million in cash from operating activities and maintained a strong year-end liquidity position, with undrawn facilities available of €977 million. The annual dividend paid to the Exchequer more than doubled to €50 million. Profit after tax was €130 million, before exceptional charges and remeasurements of €298 million, primarily in respect of discontinuing operations (Bord Gáis Energy), leading to an overall accounting loss after tax of €169 million.
“Bord Gáis again delivered a strong operating performance in 2013,” Michael McNicholas, Chief Executive, said today. “Although exceptional charges meant that we recorded an overall accounting loss in 2013, our businesses improved their performance across all key financial metrics. We also made progress on a number of far-reaching and transformational initiatives – completing the sale of the Energy business, establishing Irish Water as a new national utility and creating a road map for Ervia, Ireland’s first multi-utility company.”
Bord Gáis Networks delivered EBITDA of €346 million, a 15% increase, with profit before income tax increasing by €48 million to €159 million. Bord Gáis Energy also performed well, delivering a 2% increase in revenue to €1,353 million and EBITDA of €91 million, a 15% increase. Profit before income tax rose from €8 million to €12 million, while the business continued to offer the lowest standard electricity prices in the market.
An impairment of €224 million (post tax) was recorded in respect of the Energy business, primarily due to the impact of a number of enduring market factors on the future cash flows of the Whitegate combined-cycle gas turbine plant. Energy generation from coal and renewables contributed to reduced demand for gas and the Irish gas generation market was further negatively impacted by the East-West interconnector becoming fully operational.
In December 2013, after extensive market engagement, a consortium comprising Brookfield Renewable Power Inc, Centrica plc and iCON Infrastructure, was selected as the preferred bidder for the Bord Gáis Energy business. The sale closed on June 30, 2014, realising an enterprise value of €1.1 billion for the business. Dividends to the State arising from the sale of the Energy business are expected to be up to €1 billion, subject to the restructuring of the Company following the sale and full consideration of the appropriate gearing level in line with the Company’s growth plans, as well as regulatory and policy objectives.
The Company’s financial statements recorded an exceptional charge of €72 million (post tax), reflecting the difference between the adjusted carrying value of Bord Gáis Energy assets and the proceeds from the sale of the Energy business. This charge includes all transaction costs, but does not reflect all contingent consideration which may be received in subsequent years.
Irish Water was incorporated as a subsidiary of Bord Gáis in mid 2013 and was established as a new utility and its national metering programme has installed more than 300,000 water meters to date. On schedule, on January 1, 2014, Irish Water formally took over responsibility for public water services in Ireland. Irish Water’s Capital Investment Plan, published in May, proposes to invest €1.7 billion by the end of 2016 to begin addressing the significant problems in our national water infrastructure.
With the sale of the Energy business and the establishment of Irish Water, Bord Gáis is no longer an energy company. It is becoming a multi-utility infrastructure company, supporting Irish economic growth by delivering strategic gas and water infrastructure and services. Under the new name of Ervia, the company will include two significant national utilities in Gas Networks Ireland (formerly Bord Gáis Networks) and Irish Water.
“The scale and pace of change which Bord Gáis is managing is remarkable,” McNicholas added. “2013 was a challenging year, with the sale of Bord Gáis Energy and the establishment of Irish Water. Delivering these major projects, while meeting the operating performance targets of the business, was achieved only because of the hard work and unstinting commitment of our staff.”
2013 Financial Highlights
- Generated €437 million EBITDA, an increase of €58 million from 2012, despite a challenging economic and financial environment. EBITDA from continuing operations was €346 million, a year on year increase of 15%.
- Completed the sale of Bord Gáis Energy business, achieving an enterprise value of €1.1 billion. Dividends to the state expected to be in the order of €1 billion.
- Successfully secured financing facilities totalling circa €303 million, and the early redemption of Private Placement Debt of €194 million.
- Continued to deliver an annual dividend to the Exchequer which amounted to €50 million in 2013, more than double the €24 million dividend in 2012.
- Generated net cash during 2013 of €458 million, reflecting the strong cash generating capability of the business, to fund ongoing infrastructure investment, dividends, and financing costs.
- Exceptional charges and remeasurements which arose in 2013, were €298 million (post tax), leading to an overall accounting loss after tax of €169 million.
- Invested €230 million in gas infrastructure and energy assets.
- Improved profitability and financial metrics, including a strong balance sheet and year end liquidity position, with undrawn facilities available of €977 million.
- Group continues to maintain strong investment grade metrics with S&P and Moodys.