Bord Gáis has reported a 28 per cent rise in pre-tax profits to €114 million for 2002, but has warned that future profits will be lower due to a major investment programme and greater competition in the gas market.
Turnover at the state-owned company rose 14 per cent to € 652 million with the company adding 31,000 extra residential customers and 1,000 industrial and commercial customers.
Revenue from transporting gas to Hunstown and Synergen power stations also helped to push up profits.
While turnover was up, the cost of sales rose by more than 25 million to € 351 million, with pay-related costs up by approximately €4 million. Profit after taxation was €98 million, compared to €75 million for the year before.
The company provided for bad debts of €9.6 million, the majority of which related to the liquidation of IFI last October. IFI was a major creditor of Bord Gáis.
Chief executive Mr Gerry Walsh said profits had peaked at €114 million and financing re-payments and depreciation charges would hit the bottom line in the year ahead.
The company has secured €500 million via a syndicated bank loan, bringing its borrowings to over €1 billion.
The company's level of debt was not a problem said Mr Walsh and was normal for companies operating in the energy and gas sectors.
Mr Walsh said the company would pay a €22 million dividend to the Government covering 2002. He said the future ownership of the company was a matter for the Government.
The company is facing a major challenge to hold on to its market position in the coming years, although Mr Walsh said any loss of revenue would be offset by gains in the electricity trading business. It currently has about 14 per cent of the eligible electricity market.
He said two of the company's subsidiaries - telecommunications firm Aurora Telecom and combined heat and power firm BG Cogen - would start to contribute in a serious way in future years.
Aurora, said Mr Walsh, was involved in laying a 35 kilometre fibre optic cable in the centre of Dublin.
He said at present the value of Aurora's assets was €6 million.
The company has ploughed most of its capital investment into major infrastructure, including a gas pipeline to the west, an interconnector with Britain and a pipeline to the Isle of Man.
Over 80 per cent of the gas market is now open to full competition and full liberalisation, including the household market, will take place by 2005.
In 2002, Mr Walsh said 35 per cent of natural gas by volume was provided by suppliers other than Bord Gáis and this reflected increased liberalisation in the market.
