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Irish-based energy trader Erova’s profits drop to €5.7m

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Erova Energy has expanded its presence on the offshore wind energy market in the UK. Photo: Rafa Irusta Machin

Erova Energy has expanded its presence on the offshore wind energy market in the UK. Photo: Rafa Irusta Machin

Erova Energy has expanded its presence on the offshore wind energy market in the UK. Photo: Rafa Irusta Machin

The after-tax profits Dublin-based energy trading provider Erova Energy – which was co-founded by two former ESB executives – fell last year to €5.7m from €8.5m the previous year, newly filed accounts for the business show.

The energy trading business’s revenue surged to €293m last year from €91m in 2020 due to the continuing rise in wholesale energy prices.

It focuses on the provision of risk and revenue optimisation of renewable energy technology. It has also expanded its presence on the offshore wind energy market in the UK.

Erova was co-founded in 2015 by its managing director Michael Brennan and director of trading Fergal O’Donnell.

Mr Brennan worked for the ESB as a proprietary trader and analyst, while Mr O’Donnell managed the semi-state company’s thermal fleet, renewables and interconnectors.

Until 2018, Erova was solely owned by the co-founders as well as a UK backer and Swiss private equity firm, Seren.

A sales process for Erova was launched in the middle of 2017 by advisory firm Jones Lang LaSalle.

In 2018, Japanese corporate giant Mitsui acquired a significant stake in the Irish company. It now owns 35pc of the business.

Last year, Erova paid a €2m dividend to shareholders, which followed a €3m dividend paid in 2020.

The latest set of accounts for Erova note the impact of soaring energy prices over the past year.

“The historic rally in commodities was most notably felt in the UK supply market and led to over 30 UK power and gas suppliers – as well as the largest provider of gas shipping services – failing,” the accounts note.

The company said that in 2020, it had introduced an internal credit scoring system to set limits, monitor and report bilateral credit exposures.

“This system, along with responsive settlement processes, helped Erova minimise its exposure to the default of two UK supply market counterparties,”  the accounts point out.

They add that Erova secured an expanded credit facility with a key relationship bank, giving the firm greater liquidity, if needed, as “wider energy market credit events become more commonplace”.

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Last month, another Irish energy trading firm, ElectroRoute, was wholly acquired by existing shareholder Mitsubishi in a multi-million-euro deal.

The Japanese group already owned almost 65pc of the company, having bought a controlling stake in 2016.

Dublin-headquartered ElectroRoute was founded by executives, including its chief executive Ronan Doherty, in 2011 and employs 90 people across Ireland, the UK, mainland Europe and Japan.

Its profit after tax increased to €7.3m last year from €5.8m in 2020.

Separately, wind energy provided 21pc of Ireland’s power in July, new figures released this morning show. Wind has now provided 34pc of Ireland’s electricity since the beginning of the year, according to data from Wind Energy Ireland.

“While figures in July are lower than previous months, this is in line with seasonal expectations,” said Noel Cunniffe, the chief executive of Wind Energy Ireland.


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