Operating profit at ESB Group increased by 17% to €520m in the first half of the year compared to the same period a year earlier.

Operating profit before exceptional items was €357m for the six months to June 2022. The company said higher generation margins were offset by lower levels of profitability in the Customer Solutions business.

An exceptional non-cash gain of €162m was recognised in the income statement relating to the change in the fair value of certain commodity contracts that hedge the group's exposure to price risk.

“The gain arises as a result of high forward market prices for those commodities relative to contracted prices and it creates a mismatch between the recognition of gains and losses on these contracts and other hedged positions which are not recorded at fair value,” the company explained.

ESB said capital investment in the period was c.€500m, with 85% going towards electricity network infrastructure. In addition, over €100m was invested by way of shareholder loans primarily to joint venture offshore wind projects in Britain.

In Association with

The group’s five reporting segments are managed separately.

• ESB Networks' operating profit of €117m was down €89m compared to the same period in 2021, primarily due to a decrease in regulated tariffs together with an increased depreciation charge due to the growing and changing nature of the asset base.
• Generation and Trading's operating profit of €309m (excluding exceptional items) was up €219m due to higher wholesale market prices in both Ireland and Britain.
• Northern Ireland Electricity Networks’ operating profit of €8m was down €29m primarily due to regulated tariff changes and foreign exchange movements.
• Customer Solutions' operating loss of €44m compares to a profit of €31m for the same period in 2021. While financial performance in Ireland was largely in line with the first six months of 2021, losses were incurred in Britain due to the disconnect between rising wholesale market costs and the government-imposed price cap.

Other segments include Engineering and Major Projects, Corporate Centre and Enterprise Services, which provide services to the other business segments.

This segment, which includes most financing costs, reported an operating loss of €33m for 2022 compared to a loss of €1m in 2021. This was largely due to a foreign exchange loss on inter-company positions compared to a gain in 2021.