Irish electricity and gas utility Energia saw its earnings jump 40 per cent in its latest financial year, delivering a boost to its US private-equity owner, which is planning an exit after eight years.
New York-based investment firm I Squared Capital has hired investment bankers from Morgan Stanley and Barclays to sell the company, sources said last month.
This follows reports in February that I Squared was preparing to mount a third attempt to sell the business. Reuters said at the time that Energia, which is headquartered in Dublin but run by an executive team based in Belfast, may be sold at an enterprise value of about €2.75 billion.
Energia’s earnings before interest, tax, depreciation and amortisation (ebitda) rose to €374.9 million for the financial year to the end of March from €267.1 million for the previous 12 months. Still, it signalled in the annual report that its earnings are likely to decline this year as energy prices normalise after a period of exceptional volatility.
The group’s renewables business, which owns and operates 309 megawatts (MW) of wind assets and purchases electricity from 1.23 gigawatts (GW) of third-party green energy producers, saw its ebitda decline 50 per cent to €111.9 million as a result of lower energy prices and wind volumes.
Earnings in Energia’s flexible electricity generation division – owner of two so-called combined cycle gas turbine plants in Huntstown, north Co Dublin, as well as a 50MW battery storage facility in Belfast – slumped 73 per cent to €55.9 million. This was mainly due to planned outages at the 747MW Huntstown plants early last year, lower utilisation of both facilities and a decline in power prices.
However, the customer solutions unit, which supplies electricity and gas to almost 300,000 customers in the Republic and about 550,000 in Northern Ireland, swung to an ebitda profit of €207.1 million from a loss of €162.1 million as a result of higher margins. Earnings in this division had been squeezed over the two previous years by a sharp spike in wholesale power prices following Russia’s invasion of Ukraine.
“During the year commodity and wholesale electricity prices, interest rates and inflation all stabilised somewhat from the high and volatile levels experienced in recent years,” Energia said in its annual report. “While the group’s businesses remain resilient, the exceptional price environment and resulting ebitda performance in financial year 2024 is expected to normalise in financial year 2025.”
Energia previously disclosed that it paid out €200 million in dividends to its US parent in the first nine months of its last financial year. That eclipsed the €181 million of dividends distributed by Energia under the first six years under I Squared’s ownership.
I Squared, founded a dozen years ago by former executives at Morgan Stanley’s infrastructure arm, acquired Energia – then known as Viridian Group – in 2016 from Bahrain’s Arcapita Bank for €1 billion. Arcapita had owned the company for almost a decade.
Neither Energia nor I Squared has confirmed the current sale plan.
Energia had net debt of €449.6 million at the end of March, after accounting for the company’s €373.8 million of cash and cash equivalents.
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