Energy firm's good return on capital

Aes Ballylumford is the renamed company which owns and operates the electricity generation plant at Ballylumford on Islandmagee, Co Antrim. In August 2010 it was bought from the previous owners BG Group, by the group which also owns the Aes plant at Kilroot.

The registered accounts do not offer an explanation of the way the finances of the company are impacted by, first, the degree to which this plant is contracted to generate electricity and, second, the diminishing impact of the former Power Purchasing Agreement on the trading relationship with the former NIE Energy Supply company. A further feature possibly affecting turnover has been the expansion of the volume (and value) of electricity bought from Great Britain and imported through the Moyle Interconnector (now, in mid-2011, temporarily out of service).

The registered accounts make no provision for a return on capital to the plant owners. In August, the business was bought for £81.6m. Then following a group restructuring, the value of the investment was increased to £103.1m. Based on these capital values, the pre-tax profits as stated represent a good return on capital.

The annual report reveals no dividends to the then owners since 2008 when a dividend of £25m was noted.

There are some uncertainties about the future generating capacity of the Ballylumford investment. There is a diminishing provision for voluntary redundancy which is currently valued at £14m but is expected to be utilised by 2015 when the B units in the plant are expected to close.

The company report says AES Ballylumford has purchased a Welsh-registered company AES Barry for £21m. This Welsh company is not trading actively and seems to be significant because it is owed significant sums from a former trading client.