ESB Group’s operating profit saw a significant decline of over a third in the first half of the fiscal year owing to continued decrease in energy costs. Despite this, the group reported it was still surpassing previous standards with its business growth.
According to its six-month interim results ending June 30th, the group’s revenue plummeted from €4.9 billion to €3.7 billion in a year-over-year comparison. The operating profit in the first half of 2024 stood at €446 million, a substantial decrease of 34 per cent or €230 million compared to the same time in 2023. The post-tax profit was €171 million, and the earnings prior to interest, taxation, depreciation and amortisation were €883 million, a decline from over €1 billion the previous year.
The group cited the dip in earnings to a reduction in energy margins within its power generation and trading operations as prices carried on stabilising post the uncertainty of 2022 and the beginning of 2023.
The interim findings also made known an exceptional provision of €135 million pertaining to the Neart na Gaoithe offshore wind project, which had been delayed in its construction.
ESB’s chief financial officer, Paul Stapleton, explained the performance for the initial half of the year mirrored the more steady global energy market situation. “A considerable ease in wholesale market prices led to a decrease in profitability in our power generation operations, both within Ireland and the UK in contrast to last year. Nevertheless, enhanced profits from our networks’ businesses, a product of continued substantial investments in these sectors, kept the Group’s position sturdy and an overall strong performance,” he declared.
The ESB-owned energy provider, Electric Ireland, has recorded three dips in energy prices in the past dozen months, the latest one being this month. “Electric Ireland has conveyed the advantages of wholesale price deductions to its clientele,” Stapleton disclosed. “However, we remain cognizant of the repercussions of unchanging elevated energy prices, promising our dedication to assist our customers in any feasible way.”
The company continued its investments in infrastructure, allocating €751 million in the first six months of the year. The majority of this expenditure was put into electricity network infrastructure under regulated schemes.
Around six GigaWatts (GW) of large-scale renewable energy sources are presently linked to Ireland’s power grid, incorporating over 1GW of solar PV production. Additionally, ESB has included 1GW of storage, striving consistently for the decarbonisation of the power structure.
According to Mr Stapleton, ESB is steadfast in its endeavour to amplify the volume of capital expenditure, with the goal of upholding a dependable and ecological power system as the energy paradigm shifts towards being zero emission.
“Keeping ESB financially robust is crucial in enabling us to consistently finance these investments,” he added.