Financial News

  • 17 August 2014, 14:32

Npower's Profit Plummets By Almost 40%

Npower has become the latest of the so-called big six energy suppliers to announce a double-digit drop in profits.

The company reported a pre-tax profit of 109m for the first half of the year, dropping 38% from 176m for the same period in 2013.

Npower said it represented a profit of just 14 per customer account in the six months to June and the fall was due to its investment in energy efficiency and increased costs in improving customer service levels.

It comes after consumer group Which? revealed that Npower received the most amount of complaints of the 'Big Six' in the first quarter of the year with 83 complaints per 1,000 customers during the period.

Npower was deluged with complaints relating to a new billing system - a situation it has repeatedly said it is putting right.

Last month the energy Ombudsman said complaints about energy companies had soared to their highest ever level in the first half of the year.

On releasing its financial results Npower said: "Since the end of last year the company has substantially cut the number of customers who are billed late, and is now billing 96% of its customers on time.

"Total number of complaints received by Npower in Q2 2014 has been reduced by over 18% compared to Q1."

As well as increased spending on customer services, Npower said investments around the Energy Companies Obligation (ECO) strategy, had also cost the company.

The ECO was introduced by the Government last year to reduce the UK's energy consumption.

Npower said it had spent millions of pounds installing energy efficiency measures in homes across Britain and saw higher costs in the first half of 2014 compared to the same period in 2013.

It said it had invested a total of 324m into Britain so far this year, predominantly into renewable energy projects.

Npower is not alone in reporting falls in first half profits.

On Wednesday, E.ON UK announced its pre-tax profit for the period fell by 31%, while Owner of British Gas, Centrica, last month revealed it saw a 26% decrease in its profit.

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