Joan Burton
Question:29 Ms Burton asked the Minister for Communications, Marine and Natural Resources if he will make a statement on the ESB results for 2003. [19197/04]
View answerTuesday, 29 June 2004
Questions (35)
Written answers
The year 2003 was a relatively good year for ESB as can be seen from the published financial results. Copies of the annual report and accounts have been laid in the Oireachtas Library.
The results revealed a healthy financial position for the company with turnover of €2,342 million being up by 9% over the previous year. Both the operating profit of €354 million and profit after tax of €249 million were also up on the previous year. Interest and taxation was €105 million and a total dividend of €67.1 million was declared. The dividend will be apportioned €63.7 million to the Exchequer and €3.4 million to the ESB employees who have a 5% stakeholding in the company.
The results also revealed a year end deficit of €1.07 billion in the pension fund based on the accounting standard FRS 17 retirement benefits. Valuations prepared in accordance with FRS 17 require scheme assets to be recorded at market values at the balance sheet date. These valuations are not indicative of the long term funding position of the scheme, which is formally assessed by way of triennial actuarial valuation.
An actuarial valuation of the scheme was conducted as at 31 December 2003 and it disclosed an actuarial deficit of €510 million. Discussions on appropriate measures to address this position are ongoing between the company and staff. ESB stated at its press conference that it was confident the issue could be overcome in consultation with staff and recalled that similar difficulties had been overcome through the company's internal partnership processes in the 1990s.
Although profit after tax was €249 million, it would be easy to assume this represented excessive profits but this would be ignoring the complete picture. First, the level of profits must be viewed in the context of the size of the company, which has fixed assets of nearly €5 billion. ESB's current level of debt stands at €1.9 billion and this debt, which is set to increase over the coming years, needs to be serviced. The level of profits also needs to be viewed in the context of the company's capital expenditure programme. In 2003, ESB invested more than €650 million in the network infrastructure in Ireland. The replacement and upgrading of almost 17,000 km of distribution network was completed and a record 77,000 new customers were connected to the system.