Airtricity profits tumble as customers switch to rivals after price hikes
Pre-tax profits tumbled 26pc at SSE Airtricity as price hikes drove customers to switch to rival electricity companies.
Accounts just filed by SSE Airtricity Ltd with the Companies Office show that the firm saw pre-tax profit fall to €34m in the last financial last year. The tumble came despite a 5pc increase in sales to €924.4m in the year to the end of last March.
The hefty pre-tax profits of €93m enjoyed by SSE Airtricity over 2014, 2013 and 2012 allowed the company to pay a dividend of €70m to its Scottish-based publicly-quoted parent SSE.
The increase in revenues last year followed two price hikes by SSE Electricity for its 380,000 customers. The first hike came rise was 3.5pc in November 2013 and this followed price hikes of 4.7pc on its electricity prices and an 8pc increase on gas prices in October 2012.
SSE Airtricity blamed the price increase on the firm's inability to absorb the rising costs that it faces.
According to the directors' report "the results in the financial year to March 31 reflect various factors including higher energy costs and a decrease in customer numbers".
The directors add that the firm's "goal remains to grow market and a sustainable business, while managing the various market risks".
Latest figures from energy regulator, the Commission for Energy Regulation (CER) show that Airtricity is the second largest player in the domestic and large energy user (LEU) markets here.
The firm has 353,316 domestic customers and 381 large energy users.
SSE Airtricity has 17.5pc of the domestic market with Electric Ireland having a 62pc share. SSE Airtricity's share of the LEU market totals 22.3pc.
The report confirms that SSE Airtricity had the third highest number of customers in the Small Business market at 32,596 with 17.5pc market share and the third highest largest customer share in the medium business market with 10.4pc share made up of 2,556 customers.
However, in its largest quarterly report for the second quarter of 2014, the CER says SSE Airtricity's share of customers "has declined across all segments". The firm's loss of market share was marginal - in the domestic sector it declined by 0.67pc and a drop of 0.17pc was recorded in the LEU market.
Numbers employed by the firm last year increased from 334 to 405 with staff costs increasing by 11.5pc from €13.7m to €15.2m.
The profit last year takes account of non-cash depreciation costs of €5.3m.
The firm's shareholder funds last year totalled €42.3m that were made up of €26.3m in accumulated profits and a capital contribution of €17m.
Cash during the year fell from €24.9m to €2.1m. Cost of sales last year totalled €844m compared to €797m the previous year. Operating expenses increased from €41.25m to €47.49m.
The firm also benefited from €1.52m in interest received.
The company last year paid €4.6m in tax resulting in post tax profits of €29.37m.
SSE purchased Airtricity in 2008 in a €2.1bn deal that included SSE assuming €375m in debt. The deal represented a major windfall for NTR which owned 51pc of Airtricity.