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Npower profits rise by 34% to £313m

 

Jamie Grierson
Tuesday 06 March 2012 13:43 GMT
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Big-six energy supplier Npower risked public anger today after it unveiled a 34% leap in annual profits in a year in which it hiked its average electricity and gas bills.

The company, which supplies more than six million customers in the UK, said profits were £313 million in 2011, compared to £232 million the previous year.

Npower, which is owned by German utility giant RWE, lifted average tariffs for gas by 15.7% and electricity by 7.2% last October - but has since lowered gas bills by 5%.

The company said the surge in profits was driven by improved income from its power generation assets, as well as higher cost savings, while it also invested nearly £1 billion in clean energy in the UK.

Volker Beckers, RWE Npower chief executive, said the company recognised that many people are "concerned" about rising energy costs and Npower would invest in new energy infrastructure to reduce the UK's exposure to volatile energy prices.

Npower, the fourth largest provider in the UK, blamed rising wholesale prices on the global market and a commitment to invest in future energy supplies when it hiked bills last year.

But the group said its 2011 profits amount to £4.17 a month per customer account and its bills remain below the current national average.

Furthermore, RWE's total investment in the UK since 2009 of £3.4 billion is now more than Npower's combined £2 billion profits since 2006.

The company recently invested £1 billion in a gas-fired power station in Pembroke due to be commissioned in 2012 and £650 million in a similar station in Staythorpe which became operational in 2011.

Parent company RWE reported an 18% drop in underlying earnings to 8.5 billion euros (£7.1 billion) as the cost of phasing out nuclear power in Germany and losses in its energy trading and wholesale gas business.

PA

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