Energia sees profits surge as business customers decline

Profits rose by more than 30 per cent at gas and electricity supplier Energia in the 12 months to the end of March 2016 despite a slight dip in turnover resulting from lower commodity prices.

Accounts recently filed for Viridian Energy Limited, which trades as Energia, show pretax profits jumped 33 per cent to €22.2 million last year, compared to €16.7 million a year earlier.

The company reported a strong trading performance for the year after seeing profits fall by 37.5 per cent from €26.7 million for 12 months ending March 2015 due to costs associated with entering the residential electricity market in early 2014 .

Energia, whose parent Viridian also has substantial business in Northern Ireland, where it owns Power NI, reported turnover of €834 million in the 12 months to the end of last March. This compares with revenues of €838 million a year earlier.

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Operating profits rose to €26.4 million from €22.9 million, primarily due to growth in residential customers.

Businesses

Energia has provided electricity and gas to Irish businesses since 1999 and is currently a supplier to more than a third of all Irish SMEs. It entered the residential market two years ago and chalked up over 60,000 accounts within just six months.

The latest accounts show the company’s residential business continues to show healthy growth with the firm now supplying 117,600 customer sites , versus 82,800 sites for the year ending March 2015.

A breakdown of the figures show electricity-only sites were up from 52,700 to 81,700, while gas-only sites jumped from 29,500 to 35,900.

“The results demonstrate Energia’s continuing strong progress as Ireland’s most competitive supplier of gas and electricity,” said a spokesman for the company.

“Turnover depends largely on commodity prices from one year to the next and in this case commodity prices reduced which fed into the overall market,” he added.

While the company’s residential business showed growth, there was a decline in the business segment.

Business customers

Energia said that at the end of the period under review it supplied approximately 22 per cent of the non-residential electricity market by volume, down from 26 per cent a year earlier. Business electricity customers fell from 49,000 to 46,000 over the 12 months with sales volumes dropping to 3.9 terawatt hours (TWh) from 4.1 TWh, reflecting greater competition in the market.

“Business customer volumes can be expected to vary moderately up or down from year to year and the figures here are in line with expectations,” the spokesman said.

Business gas customers rose slightly over the year with the company’s market share rising 1 per cent to 20 per cent and the number of business customer sites supplied rising to 5,500 from 4,800. Sales volumes increased to 80.4 therms, versus 68.5 therms a year earlier.

Energia said average renewable power purchase agreement (PPA) capacity rose to 464 megawatt (MW )from 444 MW, reflecting the commissioning of new wind farm capacity. There was an increase in output of 209 gigawatt hours (GWh) to 1,356 GWh.

Dividend

The company paid a dividend of €40 million to Viridian Power and Energy Holdings Ltd last year, following a €30 million payout in 2014.

The numbers employed by the energy provider rose to 42 from 36 for the year under review with staff costs rising to €3.8 million from €3.2 million.

Aggregate remuneration for the company's three directors – Siobhan Bailey, Gary Ryan and Garrett Donnellan – last year totalled €1.18 million. This was made up of €575,000 in salaries, including pension contributions, and a further €605,000 in remuneration paid by other Viridian firms. Ms Bailey has since stepped down as a director of the firm.

Energia’s owner Viridian, which is Ireland’s largest independent integrated energy firm, injected €236 million of equity into its Republic unit last September as the group continued to restructure its complex capital base under the new ownership of US investment firm I Squared.

Viridian owns and operates the Huntstown Power Station in north Dublin, which provides about 20 per cent of the Republic’s total national electricity needs. It employs approximately 580 staff across island of Ireland.