Npower increased its earnings over 2017 despite losing 155,000 domestic customer accounts, the company has revealed in its full-year financial results.
The supplier posted a loss of £56 million on the basis of adjusted earnings before interest and tax (EBIT), marking a £34 million improvement on the figure for 2016.
The boost in performance was mainly the result of an annual cost saving of £162 million, achieved as part of its ongoing “recovery programme”, which more than offset a 3 per cent fall in household accounts to 4.56 million as well as rising energy and policy costs.
Industrial and commercial accounts were steady at 230,000, whilst small and medium enterprise accounts were down by 10,000 at 170,000.
Npower blamed fierce competition between suppliers for a £76 million drop in revenues to £6,027 million, noting that customer churn had hit its highest level in several years and margins for new acquisitions were down.
The firm said consumers continue to move towards fixed price deals, with 47 per cent of its customers on its standard variable tariff (SVT) at the end of 2017, compared to 54 per cent a year before. It attributed its customer losses to its SVT price increase in March 2017, adding that it actually gained accounts over the rest of the year. Smart meter installations reached more than 428,000.
Npower chief executive Paul Coffey said: “While we’re disappointed to end the year with a loss, we delivered a double-digit improvement in adjusted EBIT, the most significant increase we’ve seen in several years.
“We continue to perform better in customer service,” he added. “In the third and fourth quarters, Npower received the second fewest number of complaints per 100,000 customers of the large energy companies, and this figure has dropped by over 75 per cent since the start of 2014. We are absolutely focused on maintaining this momentum.”
In November, Npower owner Innogy revealed plans to merge the business with SSE’s retail arm to create a new supplier. According to the terms of the agreement, Innogy will hold a minority stake of 34.4 per cent in the business, while SSE will demerge its 65.6 per cent stake to its shareholders.
After RWE and Eon announced a major asset swapping deal on Sunday which will see Eon acquire RWE’s 76.8 per cent stake in Innogy, Coffey said the proposed merger remains “on track” and that Npower “recently completed the work to start the CMA review process”.
Innogy and RWE have both also released their full-year results this week.
At Innogy revenues were down 1.1 per cent at €43.1 billion. Adjusted earnings before interest, tax, depreciation and amortisation (EBIDTA) and adjusted EBIT were both up 3 per cent at €4.3 billion and €2.8 billion respectively. Income before tax dropped just over a quarter to €1.6 billion and net income plummeted by almost a half to €778 million.
Meanwhile, RWE saw its revenues fall by 2.7 per cent to €44.6 billion. Adjusted EBITDA increased by 6.5 per cent to €5.8 billion and adjusted EBIT by 18.3 per cent to €3.6 billion. The group turned a pre-tax loss of €5.8 billion into a pre-tax profit of €3 billion, and a net loss of €5.8 billion to a net profit of €1.9 billion.