2016 Financial Highlights
Strong Operational Performance resulted in healthy financial results
- 2016 saw a sustained solid performance with Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) of €1,324m, Capital Investment of €897m and improved Gearing of 51%.
- Prudent financial management has protected ESB’s key credit metrics from the weakening of sterling with investments in the UK generally funded by Sterling denominated debt (Including NIE Networks and Carrington power plant). Accordingly the weakening of Sterling has also reduced the euro equivalent value of Sterling debt and gearing (to 51% from 55%).
- Regulated Networks businesses in Ireland accounted for 63% of EBITDA and 57% of Capital investment in 2016.
- In 2016 ESB had a 47% share of generation in the all-island market (via Generation and Wholesale Markets) and a 37% share of electricity supply in the all-island market (via Electric Ireland).
The Networks businesses continued to successfully deliver significant capital investment programmes in accordance with their regulatory contracts to enhance network resilience and support a further increase in renewable generation increasing the Regulated Asset Base by €0.1bn to €9.1bn. NIE Networks Ltd in Northern Ireland submitted its RP6 revenue submission to the Utility Regulator for the period October 2017 to March 2024 at the end of June 2016. The Utility Regulator is planning to issue a draft determination for RP6 in late March 2017 and a final determination in June 2017.
Generation & Wholesale Markets (G&WM)
Excellent plant availability in generation at 93%, along with the successful commercialisation of the new 885 MW Carrington Combined Cycle Gas Turbine plant near Manchester in the UK, contributed to a strong financial performance from the G&WM business notwithstanding the challenging operating environment.
ESB’s retail arm delivered strong financial performance, influenced by its active management of commodity exposures while providing competitive offerings and maintaining its strong focus on customer service in what continued to be a very competitive market.
Credit Rating and Liquidity
- ESB had a strong liquidity position of €1.7 billion at the end of 2016 and ongoing access to diversified funding sources. Funding transactions were successfully completed in June 2016 for a €600 million 1.875% fixed-rate bond maturing in June 2031 and a €500 million 1.750% fixed-rate bond maturing in February 2029 in early 2017.
- ESB’s financial strength was maintained with stable credit ratings of A-, Baa1 and BBB+ with Standard & Poors, Moodys and Fitch respectively re-affirmed during 2016.
ESB Five Year Financial Summary