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Residential market entry hits Energia's profits

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Energia supplies 26pc of the business market by volume

The cost of entering the residential electricity market last year contributed to pre-tax profits at Energia decreasing by 38.5pc to €26.78m.

New accounts just filed by Energia t/aViridian Energy Ltd show that the firm recorded the drop in profit as revenues declined by 7pc to €861m in the 12 months to the end of last March.

According to the directors' report, revenues decreased by €65.9m "primarily reflecting lower customer consumption".

Energia supplies 26pc of the business market by volume and business electricity customers increased to 53,700 with sales volumes decreasing to 4.1TWh.

During the year, the company paid a dividend of €41m to its parent, Viridian Power and Energy Holdings Ltd.

The directors state that arising from the firm's entry into the residential electricity and gas market on January 30, 2014, it incurred a loss of €2.2m.

However, the firm reports that by the end of March last, the firm had 10,000 residential customers.

Separate figures from the Commission for Energy Regulation show that the number of domestic market customers Energia had by the end of June last year had increased to 24,654 making it the largest net gain of domestic customers during the period.

The directors state that the firm's operating profit last year declined from €46m to €29.1m reflecting costs of entering the residential electricity and gas market, lower contribution from renewable Power Purchase Agreements (PPA); lower sales volumes, reduced retail margins and higher operating costs.

The firm's accumulated profits stood at €47.76m.

Staff costs last year increased to €2.378m.

Irish Independent