Mutual Energy says slump in profit linked to line fault

ONE of Northern Ireland’s key energy firms has blamed a major fault on the Moyle Interconnector for an 84% slump in its pre-tax profits.

Mutual Energy Limited owns three key parts of energy infrastructure here, including the Moyle electricity interconnector from Islandmagee to Scotland. It also owns the natural gas pipeline from Scotland to Ballylumford and the natural gas transmission pipelines to the Belfast area from Ballylumford.

The firm, which employs just 31 people, is also involved in the major ‘Gas to the West’ project, bringing natural gas to seven towns in the west of Northern Ireland.

New financial results for the company showed that its pre-tax profits dropped from £10m in 2017 to £1.6m in the 12 months to March 31 2018, a drop of £8.4m. However, the company has reported a rise in revenues over the same period from £60.8m to £63.2m.

Mutual Energy Ltd has said the drop in profits was a consequence of costs arising from a major cable fault from the previous year.

In the report made public on Friday, the company said it was “disappointed” by the “high voltage fault” on the Moyle Interconnector.

Repairs were completed in September 2017 with the line returned to full capacity.

It added that the Moyle line is “fully available and ready to participate” in the new integrated single electricity market (I-SEM), which comes into operation today.

In a statement to the Belfast Telegraph, the company said: “Although Moyle’s revenue increased by £2m, costs increased by £10m, together largely accounting for the decrease in pretax profit. The increase in costs was primarily due to the difference in cable fault costs from 2016/17 to 2017/18.

“In 2016/17 Moyle Interconnector received insurance proceeds which related to cable fault costs which had been incurred in an earlier period.

“These insurance proceeds were netted with operating costs, as this was the category in which the insured cable fault costs had originally been incurred, hence 2016/17’s operating costs were lower than 2017/18. The decreased pre-tax profit in 2017/18 was therefore not primarily a result of events occurring in the current year, rather the result of the higher profit in the prior period which was caused by a mismatch of income and costs.”

Mutual Energy does not have shareholders.

In its report it states: “Unlike other businesses, we are not here to maximise shareholder benefit and we do not pay out any dividends.”