NewERA publishes Annual Financial Review 2016/17 of key State Companies in the energy, forestry and water sectors

13 December 2017 - NewERA, part of the National Treasury Management Agency (NTMA), has today published its Annual Financial Review of six key State companies - ESB, Coillte, Bord na Móna, EirGrid and Ervia (Gas Networks Ireland and Irish Water). NewERA's core role is to provide specialist financial and commercial advice to Government Ministers in relation to these and other State companies.

The financial highlights, from the perspective of Government as shareholder, include:

  • Generation of €1bn of operating profits;
  • Payment of €232m in dividends to the Exchequer;
  • A return on investment of 5.6%;
  • Capital expenditure of €1.5bn mainly in infrastructure;
  • Equity valuation of €10bn; and
  • C.12,000 employees.

NewERA director Eileen Fitzpatrick said:

"These Portfolio Companies have approximately €16bn of capital invested and play a crucial role in the Irish economy, investing substantial capital in critical infrastructure.

It is estimated that €13bn of investment is needed in the water network alone over the long term with an estimated further €4bn to be invested in the regulated energy networks over the medium term.

These Companies also play a very significant role in many priority areas of Government policy relating to climate change including bio-energy, carbon sequestration and aspects of transport.

A key aim of NewERA, working with Government departments, is to enhance the State's role as an active shareholder in the companies it owns, providing a framework for a clearer understanding of the State's objectives and financial expectations for the Companies."

In the context of the strategic, business and financial plans of each of the entities, the report identifies a number of common themes of relevance from a shareholder perspective including:

  • Brexit and its possible impact on the energy sector;
  • The delivery of investment and transformation plans for Irish Water; and
  • Ireland's transition to a low-carbon energy system and the role of State-owned companies.

The review for 2016/2017 shows NewERA's work with the six Portfolio Companies in its statutory remit included advice on:

  • €3bn in borrowings by commercial semi-States;
  • €2.8bn in capital budgets and infrastructure investments, mostly relating to electricity, gas and water networks;
  • €0.35bn on specific capital projects in GNI, Irish Water and Coillte;
  • Board appointments at Ervia and ESB; and
  • Targets for dividends, profitability and borrowing for individual Companies.

The report also highlights that 2017 saw a significant increase in the number of corporate finance advisory assignments carried out by NewERA on behalf of Ministers across a wide range of sectors including transport, health and communications.

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