Bord na Móna’s exit from ‘coal and other loss-making businesses’ sees net debt drop

Despite a number of costs generated from Bord na Móna’s “strategic transition to a low-carbon business”, the company’s net loss of €22.5 million in the last year was half of that compared to the previous fiscal year.

Bord na Móna published its annual financial report this week, outlining the results for the year ending March 25, 2020.

‘Demand for peat was reduced’

This financial period was marked by the continued implementation of Bord na Móna’s Brown to Green strategy, which “maps the move away from peat and the company’s diversification into a range of low-carbon, sustainable operations”.

Bord na Móna’s chief executive Tom Donnellan said that during this transition, the company has “exited its coal and other loss-making businesses, simplified peat harvesting and cut the overhead cost structure of the company by 40%”.

The transition away from carbon-intensive business was highlighted in this financial year as demand for peat was reduced and ESB announced it would close its midlands power stations in December 2020.

Donnellan said that the strategic transition to a low-carbon business generated a number of costs in the reporting period, with these costs reflected in the company’s net loss of €22.5 million. However, this is approximately half that recorded the previous year.

“The results include €65.9 million of exceptional costs that are generated by the decarbonisation transition,” Donnellan added.

However, the company’s “operating profit is at €40.4 million, net debt is decreased by €23.9 million and it is finishing the year in a positive cash-flow of €1 million.”

New projects in the works

As implied by the title, the Brown to Green strategy involves moving the company towards greener, low-carbon operations.

According to Donnellan, these “green operations already generate a significant amount of our revenue and as the strategy progresses, they will come to define and sustain Bord na Móna”.

During the fiscal year recorded in the report, Donnellan said the company through ‘Powergen Development’ accelerated its development pipeline, along with Oweninny I Wind Farm becoming operational and Cloncreen and Oweninny II wind farms moved to preconstruction.

The company’s business unit ‘Resource Recovery’ agreed a significant expansion of its customer base and in partnership with Sabrina Integrated Services, launched Ireland’s only farm plastics recycling facility on the site of the former peat briquette factory in Littleton, Co. Tipperary.

Looking to the future

These projects are at an “early developmental stage and while individually quite different, all must be commercially and environmentally sustainable enterprises” that can generate new employment opportunities in the midlands.

Looking beyond the last fiscal year, Donnellan said the company continues to operate in a challenging business environment, which was further complicated by the onset of the global pandemic.

However, financial gains and other gains accruing from the Brown to Green strategy have enabled the company to sustain profitability and invest in further progress in the coming year.