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Strong performance in 2010 as Bord Gáis achieves one million energy customers and continues to invest in world class power generation assets

05.05.11

Bord Gáis accelerates efforts to support customers in financial difficulty.

In its Annual Report and Financial Statements for 2010, Bord Gáis Éireann showed strong growth in its gas and electricity businesses, continued development of new assets and a significant increase in its energy customer numbers.

Despite the challenging domestic environment, the company performed well in 2010. Turnover grew by 12 per cent to €1.51 billion, while profit before tax remained relatively stable at €120 million. Tangible fixed assets were €3.62 billion and EBIDTA increased year on year by 8 per cent to €354 million before exceptional items. Concerns during the period included the increase in international wholesale energy prices and a significant uplift in customer bad debt. By the end of 2010, Bord Gáis had approximately one million customers, including 460,000 electricity customers.

The development and acquisition of significant power generation assets is a strategic priority for Bord Gáis, so the commissioning of the Whitegate Power Plant in Co. Cork was a major landmark for the company in 2010. Whitegate is one of the most efficient electricity generation facilities in the world today. It is the company's first major gas-fired power station and cost €400 million to develop. In 2010, the company invested €200 million in capital projects to support the delivery of a balanced portfolio of secure, competitive and efficient energy solutions, including renewables, to customers. This brings the company's total capital expenditure in the last five years to €1.97 billion.

Rose Hynes, Chairman of Bord Gáis Éireann, said: "The 2010 performance sees the company on target to meet the objectives set in out in the five year strategic plan published in 2008. Bord Gáis Éireann is continuing to make substantial progress with key milestones being realised such as the achievement of one million customers, continued investment in developing wind farms and alternative technologies and the commissioning of Whitegate".

Bord Gáis implemented an 8 per cent reduction in gas prices in 2010, bringing the total reduction in gas prices over the last two years to 25 per cent. According to the SEAI, when adjusted for purchasing power parity, Irish gas customers are now paying 26 per cent1 less than the EU average.

The issue of bad debt reached a critical level in 2010 and a provision of €26.4m has been recorded in the 2010 accounts. Recognising the serious social implications of customer debt, Bord Gáis adopted a proactive and supportive approach to customers who were struggling to pay their bills. The company introduced a series of measures, including early intervention, flexible payment plans and pay as you go meters. In addition to these direct measures, Bord Gáis has worked closely with the Society of St Vincent de Paul and other organisations, donating over €1 million in 2010 to assist the elderly and low-income families, and with MABS to help customers struggling to pay their energy bills.

As customer debt has increased the phenomenon of 'debt hopping' has become a characteristic of the energy industry, as customers leave unpaid debts with one energy provider and move to another. This practice results in higher costs for all customers and so Bord Gáis has recently proposed a series of measures to the regulator to address this.

Bord Gáis continued to innovate its service offering and in 2010, the Bord Gáis Home Team was launched to offer a 'one stop shop' for energy efficiency solutions in the home. Bord Gáis Home Energy Consultants can now handle SEAI grant applications, and in addition, customers can also access energy efficiency financing on an interest free basis and can manage repayments through their regular bills. Since launch, take up has been strong with 15,000 consultations this year and 110,000 completed installations in customers' homes.

Commenting on the results, John Mullins, Chief Executive of Bord Gáis Éireann said: "This was a year of progress for Bord Gáis. The company returned a dividend of €30 million to the Exchequer in 2010, bringing the total dividend paid by Bord Gáis to €797 million. Last year was a difficult time for many of our customers and Bord Gáis worked hard to ensure that we provided best in class service, innovative online account management solutions, including the Bord Gáis Energy iPhone app, and continuity of service throughout the extreme weather conditions. We remain committed to working closely with customers in arrears to offer support and genuine flexibility in terms of repayment plans."

Mr Mullins continued: "Looking forward, international wholesale energy prices remain a concern and this will put increasing pressure on prices throughout 2011. Another key challenge facing the company this year is that Bord Gáis is the only regulated provider in the gas sector, and as such, faces considerable constraints in terms of its ability to compete on a level playing field. This needs to be addressed urgently."

Contacts

Larry Donald,
Bord Gáis
Mobile: 087-258 1787

Christine Heffernan,
Bord Gáis
Mobile: 087-050 5555

James Dunny
Fleishman-Hillard:
Tel: 086-388 3903