LAST UPDATE | 16 Sep 2022

TAOISEACH MICHEÁL MARTIN has said the Irish Government “can look forward to a much higher dividend” from ESB as its after-tax profits have tripled in the first half of the year.

The ESB Group after-tax profits tripled in the first half of the year compared to the same period in 2021, reaching €390 million.

The €390 million profit after tax and exceptional items for January to June is more than three times higher the same figure last year of €128 million.

Revenue and other operating income also jumped from €2,154 million to €3,678 million, though profit before tax and exceptional items fell slightly from €363 million to €357 million.

The company’s interim financial statements for the first half of the year come amid increased scrutiny on the energy sector as wholesale prices and consumers’ bills soar, as well as multiple suppliers deciding to leave the Irish market in recent months.

Speaking to reporters today, the Taoiseach said as the Government is a shareholder on behalf of the Irish people, it receives a dividend from the company.

“Obviously, given the scale of the profits on the back of the energy crisis, I think the Government can look forward to a much higher dividend than would have been the case prior to the crisis.

“And we can use that then to underpin the Government’s efforts to reduce pressures on households, and also protect jobs. And that’s what we’re going to do in the cost-of-living package next week and in the budget,” he said.

Tánaiste Leo Varadkar said it is “right and proper” that the Government should take back some of the big profits that energy companies are making. 

“When it comes to ESB, we could do that through one of two ways,” said Varadkar

“Either windfall tax or taking a bigger dividend from the company because it is owned by the people ultimately, and we would use that money to help bring down costs for families and businesses.

He added that the electricity market needed to be decoupled from the gas market, which is currently being examined at EU level and would help reduce prices.

In terms of ESB, as the Government is a shareholder, there are a few options including through a windfall tax or taking a bigger dividend from the company, he said.

Martin said ESB profits and the windfall measures at European level will bring in revenue, but he said the surplus already in place will provide the “firepower”, certainly in the medium term, to help with rising electricity bills.

ESB Chief Financial Officer Geraldine Heavey said that “volatility and high wholesale market prices continue to be a feature of energy markets in 2022″.

“In the first six months of 2022, ESB delivered an operating profit before exceptional items of €357 million and capital investment of €532 million,” Heavey said.

This provides the basis for continued strong investment in energy infrastructure to decarbonise electricity, improve resilience and empower customers in line with our 2040 Net Zero Strategy.”

All eyes are on the energy sector and Government as the cost of electricity and gas has risen in recent months and Budget 2023 approaches, which Government has insisted it will use to alleviate pressure on the public.

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At a European level, the EU has announced plans for a “deep and comprehensive” reform of the electricity market, with measures such as a cap on electricity producers’ profits and decoupling the price of gas and electricity.

EU Commissioner for Financial Services Mairead McGuinness, speaking on RTÉ Radio One’s Today with Claire Byrne, said today that the “whole idea” behind a windfall tax is to redistribute profits “at a time when households and businesses are really suffering from astronomical energy bills and those companies who are producing energy renewables are making significant and unexpected profits”.

“It is up to each member state to calculate what might be there but it will be significant in all member states because it means that rather than the price continuing to grow, that there is now a mechanism to say beyond this [level of profit], there will be a redistribution of the payments,” McGuinness said.

In a statement today, Sinn Féin TD Darren O’Rourke called on Minister for Energy Eamon Ryan to “take action now to help households and businesses”.

O’Rourke, the party’s climate action spokesperson, said he felt people would be “livid” at the level of profits at a time when “businesses are on the brink of closure and households are living in fear of the next bill”.

“Currently, the ESB is not permitted to use group profits to limit, freeze or decrease prices at Electric Ireland. Given the scale of the crisis this is something that must be urgently changed,” O’Rourke said.

“The rule book was not designed for the current emergency.”

With reporting by Christina Finn