Npower loss as it battles customer exodus

Npower posts loss as it battles customer exodus

Npower posts loss as it battles customer exodus

German owner Innogy says the “sword of Damocles” hangs over the energy market in the form of possible government intervention.

13:28, UK,
Friday
11
August
2017

Npower office
Image:
Npower is owned by Germany’s Innogy

Big Six gas and electricity supplier npower slipped to a €12m (£11m) loss for the first half of the year as it battled a customer exodus, owner Innogy said.

The German company added that the business faced a “sword of Damocles” hanging over the sector because of the possibility of UK Government intervention to curb bills.

Npower’s first-half loss compared with a profit of €85m (£77m) for the same period last year and Innogy said it was not expecting the UK division to turn a profit for the full year.

The supplier lost 200,000 customer accounts in the first quarter of the year amid billing problems and competition from smaller suppliers.

It turned the tide in the second quarter, adding 50,000 to take the total number to just under 4.8 million, but said “the competitive landscape… remains very tough in the retail business”.

Npower came under fire in February from regulator Ofgem and the Government over a 9.8% hike in standard prices, adding £109 to a typical bill.

The energy sector was under the spotlight during the General Election with a pledge by the Conservatives to cap bills.

The Government since appears to have backed away from the pledge but launched a review this month on how best to reduce bills.

Innogy’s chief financial officer, Bernard Guenther, said: “The sword of Damocles still hangs over all of this, in the form of further regulatory intervention by the UK Government.”

The results were published as industry body Energy UK revealed that more than three million customers have switched electricity supplier this year, a 14% increase on the same period in 2016.

It said one in five were choosing to sign up with small and medium-sized suppliers.

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