The ESB chief executive designate Mr Pádraig McManus yesterday pledged to double post-tax profits by 2007 despite its obligation to significantly reduce market share.
Mr McManus briefed managers on a new corporate strategy, which will see the State electricity company focus on its core business and accelerate investment in upgrading its creaking infrastructure.
The deadline for completion of a major renewal programme will be brought forward to 2007 from 2010, subject to funding and approval by the energy regulator, Mr Tom Reeves.
The company has not yet published its 2001 annual report, but post-tax profits last year are believed to be in the order of €200 million. That suggests Mr McManus aims to generate annual profits of €400 million in five years' time.
The company was unable to explain yesterday how this would be achieved in a period during which its monopoly in the generation market will be reduced by 40 per cent and it will face increasing competition from independent suppliers. The company has initiated a cost-cutting plan that will take 2,000 workers from its 8,000 staff and will start a "major drive" to cut procurement, property and service costs.
But while electricity prices rose last year and a further increase is expected in 2003, the aim of deregulation in the market is to reduce prices through competition.
This suggests Mr McManus's profit target is very ambitious, particularly as it has no control over the price of gas and oil used in power generation.
In addition, in the medium term it will receive only wholesale rates for half the output from a new power station that is being commissioned at Ringsend, Dublin.
This follows an agreement with the European Commission, which had expressed concern about the ESB's dominance of the Irish market.
While Mr McManus promised successful international investment, the €175 million he set aside for that purpose is much smaller than the €1.8 billion the company wanted to spend on a Polish acquisition last year.
It is also significantly below the €250 million it is spending on a plant in Co Derry and the €450 million required to build an 800 megawatt (MW) plant in Spain's Basque region.
Mr McManus said he wanted to modernise the ESB's generation portfolio and added that units that became "uneconomic" would be closed.
A document yesterday said he would give priority to meeting customer need and to the release of staff potential.
