• Bord Gáis announces 13% increase in turnover, driven by gas and electricity sales
• Share of electricity market rises to 8%
• Pre-tax profit declines by 9% as a result of wholesale price increases
• €1.5 billion capital expenditure programme progresses as planned
• Key milestone - connection of first natural gas customer in Northern Ireland

Bord Gáis today announced annual results for the year ended 31st December 2005 and reported strong performance in existing and new markets.

The company is seeking a price rise of between 30-40% from the energy regulator.

Chairman of Bord Gáis, Mr Ed O'Connell, said; "The excellent performance of the company in 2005 can be attributed to the company's strategy of achieving sales growth while progressing our €1.5 billion capital investment programme. When viewed against the backdrop of what was a challenging year for the industry, particularly in relation to the cost of gas, it is very satisfying that the company made significant progress in a number of areas, including successfully entering new markets, finalising preparations for full market opening and very effectively managing the company's operating costs ".

The key driver of turnover growth has been the increase in sales of gas and electricity. Bord Gáis' share of the electricity supply market has risen to 8% by volume in the year under review, with sales in electricity recording highest turnover growth for the Group in the year, up 30% to €161 million, accounting for one fifth of group turnover. Bord Gáis intends to secure its future position in the Irish electricity market by developing an independent power generation plant and it announced, on April 21st 2006, its plan to seek approval to develop a 440 MW gas fired power plant in Whitegate in Cork, involving an investment of €300 million.

Gas sales remain the largest part of the business in 2005 with turnover at €552 million - up 11% on the previous year. Figures revealed that the number of gas users in Ireland exceeded 540,000 by the end of the year, an increase in 7% on 2004. Power generation accounted for 59% of total gas demand in Ireland during 2005, with industrial / commercial users consuming 24% and, finally, the residential sector, which increased by 34,500 users during the year, accounting for 17% of gas used in 2005.

Gas Transportation, the division of Bord Gáis that provides gas transportation services to all shippers across transmission and distribution pipelines, accounted for €110 million in external turnover, up 5% in the year. The gas market in Ireland has been successfully open to competition for all non-household customers since July 2004 with independent shippers accounting for 58% of total gas sold in Ireland in 2005, up from a 50% share in 2004. Bord Gáis has finalised preparations to enable gas supply competition in the residential sector and this is expected during 2006.

The Chief Executive of Bord Gáis, Mr Gerry Walsh commented on the year: "I am very pleased with the company's performance in its two core areas - the development and operation of gas networks and the supply of gas and electricity, particularly in the context of a challenging and changing external environment - where we have seen continued growth, operationally and financially. Corporately we are adapting successfully to significant changes in the energy and regulatory environment and will continue to do so as we embrace the final phase of gas market opening and the development of an all-island gas and electricity market".

Figures released today also show that pre-tax profit at the company declined by 9% to €108 million in 2005, attributable to the significant price increases on the international wholesale gas markets. Bord Gáis acknowledged that the price rises have also resulted in significant increases in retail price levels and that it is a challenging time for energy pricing. Despite the upward movement of retail gas prices, natural gas continues to be the cheapest option for homeowners in 2005 when heating a home with oil was, on average, 35% more expensive than with gas.

Commenting Gerry Walsh said: "Regrettably, but unavoidably, 2005 saw wholesale gas price increases filter through to the retail customer. Although, in the short term, we are likely to experience further wholesale price increases and therefore further retail increases, new pipeline routes and the construction of LNG plants in Europe will increase the volume and diversity of gas supplies and this should have a stabilising impact on price in the medium to long term".

Indigenous gas supplies, specifically from Kinsale Gas Field, accounted for 13% of total Irish gas demand during 2005. This proportion could be significantly increased if additional indigenous gas supplies from the Corrib Field come onshore, supplying up to 60% of Ireland's annual demand at peak production.

On the issue of gas supply, Gerry Walsh said; "We are very comfortable on the issue of security of supply of natural gas. Bord Gáis currently sources the majority of its gas supplies from wholesalers of UK North Sea gas fields. Going forward, we want to secure part of the new indigenous supplies from the Corrib gas field for our portfolio, as well as continuing to source gas from suppliers to the UK market".

Development of gas infrastructure plays an important role in Bord Gáis' expansion strategy. In the context of its €1.5 billion capital expenditure programme ('05 - '09), of which €250 million is earmarked for Northern Ireland, Bord Gáis continues to invest heavily in the construction of gas infrastructure. At the end of 2005 the company had completed 71km of the 149 km Mayo-Galway pipeline; construction of 339km of distribution pipeline and renewal of 199km of pipeline as part of the ongoing mains renewal programme. In addition, 2005 saw the granting of planning permissions and consents for the South North pipeline to be built in 2006, which will link Gormanston in Co. Meath to Ballyclare in Co. Antrim.

Also in 2005, a new connections policy which was agreed with the CER allows Bord Gáis to re-asses the viability of towns in close proximity to major pipelines, encouraging greater utilisation of the gas networks while minimising the impact on gas transportation tariffs.

A key milestone reported in the year was the connection of Bord Gáis' first natural gas customer in Northern Ireland. This followed the completion of the North West pipeline, connecting Carrickfergus in Co. Antrim to Derry City, in 2004 and the winning of licences to distribute and supply ten towns in Northern Ireland by Firmus Energy, Bord Gáis' business in the North.

Concluding Gerry Walsh said: "2005 was a challenging year for the energy sector, and by extension Bord Gáis. All indications point to an even more challenging year in 2006. Against this backdrop, as a dual fuel provider operating successfully in Ireland and Northern Ireland, we hope to build on our 2005 performance and continue to deliver shareholder value through delivering competitive, long term, secure and quality natural gas and electricity services to our growing customer base".