BSE increased its operating profit by more than 45% in the first six months of the year as restrictions imposed to curb the spread of the Covid-19 pandemic were lifted, according to its interim report.

Operating income before exceptional items of 363 million euros represents an increase of 114 million euros compared to the same period in 2020.

The pandemic had a “significant impact†on the 2020 half-year operating income with a decrease in turnover due to a sharp drop in demand in the second quarter.

The company also faced restrictions on its investment program, which resulted in increased costs charged to the income statement.

The easing of restrictions linked to Covid-19, improvement in electricity demand, changes in regulated grid tariffs and positive currency movements were cited as the main drivers of the increase in operating income in 2021.

ESB is a joint venture partner in the Neart na Gaoithe project, a 448 megawatt offshore wind farm development off the east coast of Scotland.

Delays in the project and a forecast of significant additional construction costs due to harsher than expected seabed conditions resulted in an exceptional depreciation charge of 106 million euros.

In June 2021, ESB finalized the sale of its 47% stake in Tilbury Green Power, a woodfuel waste plant in Britain.

A capital gain of € 82 million was recognized in the income statement for this transaction, most of which is recognized as a reversal of previous impairments on ESB shareholder loans to the project.

Regulated tariffs

ESB Networks operating profit of 206 million euros was up 74 million euros compared to the same period last year. This is mainly due to an increase in regulated tariffs and demand for electricity compared to 2020.

The impact of Covid-19 in the first half of 2020 resulted in a 4% drop in overall electricity demand. This has resulted in lower revenues and a restriction of some capital works programs.

The positive impact on the income statement of the relaxation of restrictions on the investment program was offset by a higher depreciation charge in 2021 due to the growing and changing nature of the asset base.

ESB Networks expenses of 289 million euros were up 20 million euros mainly due to the increase in smart meter spending as well as distribution and transmission network projects.

This is mainly due to the increase in the ESB Networks investment program as well as the impact of Covid-19 on the investment program in 2020.

Other business expenses of 40 million euros were 4 million euros lower than in the previous period and included expenses for the redevelopment of the Fitzwilliam Street head office complex.

Site closure

This figure was lower than 2020 due to the extended closure of the site due to pandemic restrictions in the first half of 2021.

At the end of June, ESB had more than 550 million euros in cash. This amount included just over € 450 million related to amounts of cash collateral received in connection with mark-to-market positions in gas, carbon and electricity contracts traded on exchanges.

Excluding these amounts of collateral but including the revolving credit line and an undrawn line with the European Investment Bank, the group had at the end of June a little less than 1.7 billion euros in available liquidity.

This was significantly more than the debt repayments expected over the next 24 months of just over 150 million euros.