Bord na Móna - Source Issue 11 - (Page 7)
CRISIS
esponding to the worst harvest
in Bord na Móna’s history,
we spoke with Chief Financial
Officer Michael Barry on how the
organisation met this unprecedented
challenge to its finance with summer
2012 recorded as one of Ireland’s
wettest summers in years. “We had the
worst peat harvest in our history last
summer,” said Michael. “At 1.2 million
tonnes of peat, the harvest came in at
37 per cent of the amount expected
for 2012. We needed a harvest of 3.6
million tonnes, so the harvest was
down two-thirds.”
That harvest had a devastating
impact “as peat is still the lifeblood of
the company’s principal businesses”.
With Feedstock customers, including
Edenderry Power, Lough Ree Power,
and West Offaly Power, still needing
milled peat every day of the year, stock
levels are now precariously low. “Even
with good summers, it will take us
three years, up to 2015, to get stocks
back to a comfortable level.”
Mitigation plan
In the immediate term, the
company lost €30 million due to
the unprecedented bad harvest
and reacted quickly with a plan
to recover €24 million of the loss.
This plan includes measures aimed
at managing current peat stocks,
revenue increases and cost control
Derrygreenagh Rainfall Trends 1956-2012
MANAGEMENT
R
BORD NA MÓNA HAS PAID A HEAVY PRICE
FOR IRELAND’S POOR SUMMER LAST YEAR.
HOWEVER, STAFF ARE DIGGING DEEP TO
RECOVER THE IMPACT
initiatives, both pay and non-pay.
Savings
Those measures included cutting
discretionary spend and overhead
spend, as well as voluntary pay
reductions for certain grades of staff
within the company. In addition,
seasonal employees were not taken
on in Feedstock over the past
winter. This measure involved an
amount of redeployment of fulltime
employees within Feedstock.
Savings were also made with a
short-time working initiative for
office-based employees.
“Over the next three years, we
will do everything in our power to
recover stock levels, but we need
good summers to do that,” said
Michael. “We also have to note that,
as we approach 2015, the Public
Service Obligation will expire in
relation to Edenderry Power, so we
will no longer have a subsidy for
the electricity we produce. That
means we need to become more
competitive with regard to our cost
base. That will involve significant
change in Feedstock and we are
already restructuring workshops and
stores’ functions there.”
Revenue
The company has also taken steps
to generate additional revenue. “We
are promoting additional sales of
our products, and this has included
selective price increases to generate
more revenue where we felt the
products could take that,” said
Michael. Already, the company is
marginally ahead on its target to net
additional income and plans are afoot
to look at new revenue streams.
Staff
As with all change in Bord na Móna,
this is being done with constant
engagement with staff. “People
are what make the businesses
tick, and our plans require good
financial management, good
operations management and ongoing
engagement with employees.”
3.6m tonnes
1.2m tonnes
€30m
€24m
Peat harvest target 2012
Peat harvest achieved 2012
Financial impact
Recovered through mitigation
plan
INFORMATION S
Read Bord na Móna’s annual reports
at www.bordnamóna.ie/corporate/
reports/
Bord na Mona Monthly Production
30%
250
25%
200
150
100
50
0
Jan
Feb
Mar Apr May Jun
Jul
Months
Monthly Average 1958-2012
5-Year Monthly Average 2008-2012
Monthly Average 2012
2012
Aug Sep
Oct
Nov
Dec
15%
20%
10%
5%
0%
Apr
May
Jun
Jul
Months
Bord na Móna Historic Average
www.bordnamona.ie Source | 7
Aug
Sep
Oct
RESOURCEFUL
Rainfall mm
% Target Achieved
http://www.bordnamóna.ie/corporate/
http://www.bordnamona.ie
Table of Contents for the Digital Edition of Bord na Móna - Source Issue 11
Bord na Móna - Source Issue 11
Contents
News From
Crisis Management
Midland Power
Clean Energy Future
The Need for Change
The Gathering
Game On
Developments In
Heritage Corner
A Nationwide Spotlight
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