ENERGY: Operating profits at Northern Ireland power group Viridian fell by almost two-thirds to £37.4 million sterling in the year to March 31st despite increasing sales to £730 million from £641.1 million a year earlier.
At the pre-tax level, the group recorded a loss of £7.5 million sterling after allowing for an exceptional loss of £71.9 million sterling. Stripping out exceptionals, net profit was £48.3 million sterling, down from £65.8 million a year earlier.
The electricity group attributed the fall to difficulties at its IT services subsidiary Sx3, which led to a profit warning in March.
The trading period had been challenging but the performance was satisfactory when the difficulties at Sx3 were excluded, said the company.
Viridian said underlying profits had increased 10 per cent after a £26 million impairment charge at Sx3 and a £40.8 million write-down in respect of its telecoms venture, Nevada.
Three people lost their jobs when Sx3 closed its Dublin office in February.
Finance director Mr Patrick Bourke said Viridian's potential to increase profits would be determined by a review of electricity price controls by its regulator, Ofreg. "The extent to which we can make progress this year will be affected by that," he said.
The group has already indicated that its dividend policy will be reviewed after the tariff review.
About 80 per cent of Viridian's profits were generated from the tariffs, which Ofreg wants to reduce by about 25 per cent. Viridian's chief executive, Mr Patrick Haren, claimed that was not realistic.
He wants prices held stable for a year with a reduction of 2 per cent every year after that.
"The market would understand that this is a very important piece of business that we need to transact this year," he said. Final proposals are expected in June.
The group said its electricity supply division, Energia, had secured 100 industrial and commercial customers in the Republic. This helped increase its sales to £116.7 million from £70.5 million a year earlier.
A £142 million gas-fired plant at Huntstown, north Dublin, would be commissioned in December, the group said. However, no investor had yet emerged to purchase the 50 per cent stake in the plant that Viridian purchased from CRH when it decided to exit the business in 2000.
The group said it had signed a €220 million limited recourse loan facility for the Huntstown initiative which was secured against the plant.
Described as a long-term facility, it is being syndicated to a wider group of banks and was underpinned by a long-term fuel purchase and energy sale agreement between Huntstown and Energia.
The year-end figures reflected the sale this month to a management team of its financial services division Open + Direct.
The group proposed a dividend of 22.55p per share. The overall dividend was 2.6 per cent higher than a year earlier.
