Profits have slipped by more than 9 per cent at Bord Gáis and the company's contribution to the Exchequer has more than halved, it has emerged.

The company has yet to publish its annual results for 2003, but a copy seen by The Irish Times shows pre-tax profits down 9.2 per cent at €103 million.

The company's annual dividend to the Exchequer is down from €21.7 million to €9.7 million, although the company has paid the Government accumulated dividends over the years of €665 million.

The gas company, which has diversified into electricity supply in recent years, managed to increase turnover by 7 per cent to €701 million. However, chairman Mr Ed O'Connell said in the accounts that a major expansion programme had taken a toll on profits.

"Higher depreciation and interest costs, resulting from our significant capital expenditure programme completed in 2002, saw profit before tax decrease 9 per cent to €103 million. A dividend of €10 million was paid to the Exchequer."

The accounts noted in 2003 a 9.1 per cent price increase for domestic and small business users was granted by the Commission for Energy Regulation. Despite this rise, the company's customer base increased by 9 per cent to 450,000.

The increase in turnover was mainly attributable to increased sales of electricity, which rose by €35 million over 2002 levels.

Revenues for transporting gas also rose in 2003, mainly due to a new pipeline coming onstream from the Isle of Man and also because of additional gas shipments by power stations.

The cost of sales were up €8 million to €359 million. Bord Gáis said this was mainly caused by a rise in electricity prices.

Operating costs were up €7 million to €118 million. The account stated: "This increase primarily reflects a larger scale core business and consequently increased operating costs associated with operating the larger gas transmission network that was significantly expanded during 2002/2003."

The accounts include a segmental analysis of the company's turnover. This showed that supply of gas remained the bigger contributor to turnover, chipping in €501 million, while transmission operations provided €159 million.

The company has now amassed more than €1 billion in debt, with €372 million coming from a private placement and €335 million from the European Investment Bank.

The number of people at the company fell from 726 to 704. The total remuneration for chief executive Mr Gerry Walsh was up from €250,000 to €285,000.