Bord Gáis chief set for departure

After two successive pay cuts, the chief executive of Bord Gáis, John Mullins, will not be renewing his five-year contract as the company embarks on establishing Ireland’s newest utility — Irish Water.

Mr Mullins’s pay fell by €56,000, according to the Bord Gáis annual report which was released yesterday. Mr Mullins was paid €399,000 in 2010. His pay for 2011 fell to €343,000, although his basic salary increased €13,000 to €278,000. A note on the report states that from Aug 2011, his basic pay was to be capped at €250,000.

The director of corporate affairs with Bord Gáis, Larry Donald, said Mr Mullins intends to see out his contract and then leave.

“[Mr Mullins] joined Bord Gáis as he saw the company as a good performer, but he also wanted to contribute to the public sector. He is at a point in his career where a big decision can be made,” Mr Donald said.

Mr Mullins will be in place to oversee the sale of Bord Gáis Energy, which is expected to be completed by the end of 2013. Bord Gáis expects to take the first step in the sale of the state utility by the end of June, which will see advisers appointed.

The chief financial officer with Bord Gáis, Michael G O’Sullivan, said these types of sale normally take between nine and 12 months to be completed.

“We are talking about the sale of state assets, it is absolutely important that the sale is handled correctly and that everything possible is done to achieve the best possible price,” he said.

The annual returns show the group’s profits had been hit by the mild winter, when demand for gas had fallen sharply compared to the arctic conditions of 2010. Revenue from gas was down €20m to €715m.

This loss was offset by gains in the electricity market, where Bord Gáis increased revenues by €60m to €524m. The group’s renewable energy section also improved its performance last year.

Turnover grew by 5% to €1,608m and earnings before interest, taxes, depreciation, and amortisation (EBIDTA) increased by 4%, or €12m, to €343m.

However, profits before tax were hit by increased cost of finance and fell by 24% to €94m.

Mr O’Sullivan was keen to point out that the group’s international lenders and ratings agencies are only interested in the EBIDTA, which had outperformed analysts’ estimates.

The ratings agencies’ opinions of the group were key to Bord Gáis being chosen for the establishment of Irish Water. Bord Gáis expects to produce an implementation strategy by the end of July that will guide the establishment of Irish Water as a self-financing commercial entity, Mr O’Sullivan said.

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