Electricity and gas utility Energia’s earnings surged by 28 per cent in the first three months of its financial year, delivering a boost to its US owner as it advances plans to sell the all-island business after eight years.
Earnings before interest, tax, depreciation and amortisation (Ebitda) rose to €78.2 million for the period through June, the first quarter of Energia’s financial year, it said on Thursday.
“The group continued to deliver robust financial performance during the quarter, supported by our integrated business model and significantly underpinned by our regulated and contracted earnings,” said Ian Thom, chief executive of the group, which moved its headquarters from its historic base in Belfast to Dublin five years ago.
“The strength and resilience of the business shows that our strategy is delivering, as we continue to play a leading role in the energy transition across the island of Ireland.”
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New York-based investment firm I Squared Capital hired investment bankers earlier this year from Morgan Stanley and Barclays to prepare the company for sale, sources previously told The Irish Times.
Industry sources expect a process to officially launch in the coming months. Reuters, which first reported in February on I Squared’s third planned effort to sell Energia since 2018, put an enterprise value of about €2.75 billion, including net debt, on the group. Its net debt declined to €391.3 million in June from €449.6 million a year earlier – and is now half the level it was eight years ago.
Mr Thom declined to comment on what he called sale “speculation” in an interview with The Irish Times, saying the US firm remains “a very good owner”.
However, he said: “If and when they decide to divest, the investment thesis is excellent. And that’s key for us: to always [be able to] access capital to enable growth and perform that pivotal role that we have in the energy transition.”
The group’s renewables business, which owned and operated 358 megawatts (MW) of wind assets as of June and purchases electricity from 1.23 gigawatts (GW) of third-party green energy producers, saw its Ebitda drop 23 per cent to €20 million as a result of lower energy prices and wind volumes. Commercial operations at a 49MW wind farm started in August.
Earnings in Energia’s flexible electricity generation division owns two combined cycle gas turbine plants and an emergency generation plant, totalling 797MW, in Huntstown, north Co Dublin, as well as a 50MW battery storage facility in Belfast. Its Ebitda jumped 150 per cent to €14.7 million.
The customer solutions unit, which supplies electricity and gas to almost 850,000 customers on the island, delivered a 50 per cent increase in Ebitda to €43.5 million as it benefited from higher margins. That arm of the business had posted large losses in the two years to March 2023 amid a sharp spike in wholesale power prices.
Mr Thom said in the interview that Energia has a 3.4GW “pipeline of opportunities” across onshore wind, solar, and offshore projects. These will require significant equity and project debt to deliver.
One of the biggest obstacles to governments pursuing aggressive emissions reduction policies – despite having ambitious long-term net-zero goals – is a perceived conflict between those and gross domestic product (GDP) growth.
“But why have this unnecessary dichotomy between growth and sustainability?” said Mr Thom. “It shouldn’t be a choice between growth and decarbonisation. We can have both. The solution is to electrify as much of the economy as you possibly can and make sure the power comes from renewables.”
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