Revenues at energy trader ElectroRoute rocket on price volatility

Profits at Irish energy trader ElectroRoute soared by almost 450 per cent in the year to the end of March, driven partially by the large spike in energy prices that followed Russia’s invasion of Ukraine in February.

The company, which was acquired by Japanese industrial giant Mitsubishi last year, also experienced significant “organic growth”, it said in a statement, after expanding into new markets in Japan and Europe in the trading year.

ElectroRoute declined to provide a breakdown of its revenues, which topped €320 million in the year to the end of March 2022 compared to €98 million in the previous fiscal year, an increase of almost 330 per cent.

Profits advance

Profits climbed from €11 million in 2020 to €49.1 million last year.

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However, in a statement on Wednesday, the company said the sharp increases were “significantly aided by mark-to-market valuations of energy that will be delivered in the future”.

Mark-to-market valuation is a method of accounting that measures the fair value of assets, taking expected future price fluctuations into account based on current conditions. The accounting period for which ElectroRoute has released results includes the weeks immediately following the Russian invasion of Ukraine when investors, reacting to uncertainty around the future of energy supplies from the region, made bullish bets on natural gas, pushing up energy prices.

ElectroRoute said it also received a €300 million cash injection from Mitsubishi in the year, to allow it to “manage its way through the highly volatile energy trading environment and increased price levels”.

It said: “The capital provided by Mitsubishi allowed ElectroRoute to meet these requirements and maintain a number of profitable positions in its portfolio.”

Having hired an additional 25 staff in Ireland this year, the company, which recently announced plans to create 50 additional jobs in Ireland and Japan by 2025, also signed its first major contract in the Japanese market in 2021 with a power purchase agreement between its sister company MC Retail Energy and “a corporate buyer”, it said.

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ElectroRoute also signed two significant power purchase agreements with wind farm companies in Northern Ireland over the period and increased its battery storage project portfolio, which now represents more than 40 per cent of overall Irish market.

“ElectroRoute is incredibly proud of its continued growth,” said Ronan Doherty, executive director of ElectroRoute. “We have consistently created jobs in the industry, brought new practices and innovation, offset many million tons of CO2 through our activities, created steady and growing profits and attracted €300 million in [foreign direct investment] into the country.”