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npower First Half 2018 Results

Highlights

  • Adjusted EBIT was £5m* lower than the corresponding period of last year due to lower domestic customer accounts and the changing customer mix, as well higher metering and obligation costs. These trends were not fully offset by higher domestic consumption volumes.
  • Revenue was up £198m on the first half of 2017 due to higher domestic volumes and the impact of last year’s Standard Variable Tariff (SVT) price increase. 
  • Domestic customer accounts dropped by 350,000 year-on-year due to ongoing competitive pressures.
  • Merger between npower and SSE’s British home energy and services business remains on track after receiving SSE shareholder approval on 19 July.

Adjusted EBIT

1H 2018
£M

1H 2017
£M

Change

£M

FY 2017
£M

FY 2016
£M

Change

£M

 

(15)

(11)

(5)*

(56)

(90)

34

 

Revenue

1H 2018
£M

1H 2017
£M

Change

£M

FY 2017
£M

FY 2016
£M

Change

£M

 

3,224

3,026

198

6,027

6,103

(76)

 

Customer Accounts

1H 2018
M

1H 2017
M

Change

M

FY 2017
M

FY 2016
M

Change

M

Domestic Total

4.21

4.56

(0.35)

4.56

4.71

(0.15)

SME Total

0.17

0.17

(0.01)*

0.17

0.18

(0.01)

Industrial & Commercial

0.23

0.23

(0.00)

0.23

0.23

0.00

*Difference in adjusted EBIT shown as £(5)m and in SME customer accounts as (0.01)m due to rounding

Paul Coffey, CEO of npower, commented:

“We’re in a better position than this time last year in terms of our year-on-year changes in adjusted EBIT and revenue[1], and we’re continuing to stabilise our business through tight cost discipline.

“However, our results reflect how tough the market is for energy suppliers, especially in domestic supply. Intense market competition drove a decline in our domestic account base during the first half of the year and, at the same time, our metering and obligations costs are higher than last year, which has weighed on our profitability. To help counter this, we will continue to deliver on our Recovery Programme and will remain focused on keeping control of our costs throughout the rest of the year. 

“That said, we are making real progress in some key areas. We’re continuing to deliver our smart rollout, and are one of the industry leaders as we head towards the mass rollout of second-generation (SMETS2) meters. npower Business Solutions[2] remains a strong part of our business, and we continue to count many blue chip names as our clients.

“Our proposed merger with SSE’s British home energy and services business remains on track, with SSE’s shareholders voting to approve the transaction at a General Meeting on 19 July, which marks an important stage in the process. Meanwhile, merger integration planning continues with appointment of Gordon Boyd as Chief Financial Officer Designate for the new company.  We continue to cooperate with the CMA as they work on their Phase 2 review, and the results of this investigation are due to be announced in October.”

(ENDS)

For further information please contact the npower press office on 0845 070 2807

 

 



[1] Year-on-year changes for the first half 2018 are £(5)m for adjusted EBIT and £198m for revenue, compared to year-on-year changes of £(78)m for adjusted EBIT and £(203)m for revenue in the first half of 2017

[2] Reflected as ‘Industrial & Commercial’ in the customer accounts tables