ESB’s So Energy retail arm in UK racks up big losses

Firm’s finance boss ‘hopeful’ it will make a profit this year

The ESB acquired a majority 76pc stake in So Energy in 2021. Photo: Frank McGrath

John Mulligan

The ESB’s retail arm in the UK accounted for the bulk of a €109m loss posted by the group’s customer solutions division last year, the semi-state company has confirmed.

The ESB acquired a majority 76pc stake in So Energy in 2021 in exchange for €23.7m in cash and a 24pc share of UK-based ESB Energy, which was valued at €2.3m.

In 2021, the ESB impaired the goodwill of So Energy by €45.3m. An onerous contract provision of €16m that was held by So Energy was also impaired. Even before the crisis, So Energy was struggling. It made a near £16m (€18m) loss in the 12 months to the end of March 2021.

As of last autumn, So Energy was reported to have 300,000 residential customers. The ESB said on Wednesday that it now has about 600,000. It has likely benefited from the collapse and exit of rivals, whose demise was precipitated by the impact of Russia’s invasion of Ukraine on energy prices. About 30 residential power suppliers have exited the UK market, leaving 15.

“So Energy is one of the few true challenger brands left in the market, competing with 15 other active suppliers,” said the ESB as it released its annual results on Wednesday.

“Despite the challenges associated with the energy crisis, So Energy remains in a unique position to offer a real choice in Great Britain in the coming years, offering a renewable, innovative, digital, customer-centric experience for customers,” it insisted.

The ESB’s customer solutions unit includes Electric Ireland, its telecoms business and its e-cars business.

ESB chief financial officer Paul Stapleton confirmed on Wednesday that the “bulk” of the €109m the division lost last year was due to So Energy.

However, he said the group is hopeful that the UK retail arm will be profitable this year.

“It was a challenging year for So Energy, there’s no doubt about that,” said Mr Stapleton. “Like all retailers in the GB market, So Energy was impacted by the mandatory price caps that were put in place and the extraordinary volatility in wholesale prices.

“We believe it will be a profitable business for us this year and into the future,” he added.

Last autumn, So Energy assessed funding solutions as it dealt with soaring wholesale prices. But as wholesale prices later eased, it shelved those plans.

“Because of the change in market circumstances and the continued support from our majority shareholder… we are no longer exploring additional funding options,” said So Energy co-founder Simon Oscroft at the time.