Npower haemorrhages customers as losses widen

Npower saw losses widen last year as the energy giant lost more than 650,000 customers amid fierce competition.

Accounts filed by parent company, Germany’s Innogy, show npower’s losses grew by 9 million euros (£7.7 million) to 72 million euros (£61.8 million) in 2018 as the Big Six supplier’s margins came under pressure.

The firm also booked higher costs related to the roll-out of smart meters across the UK.

Innogy itself took a 1.5 billion euro (£1.3 billion) writedown on npower after failing to secure its merger with rival SSE last year.

SSE and npower called off the amalgamation of their retail operations in December, blaming “challenging market conditions” and the Government’s price cap.

Innogy had planned to combine npower with SSE’s UK household energy and energy services business and list the new supplier on the London Stock Exchange.

The writedown to npower has forced Innogy to cut its dividend to 1.40 euros (£1.20) a share from 1.60 euros (£1.37).

However, the company noted that it profited from the higher-than-average energy consumption of British customers and has sought to slash costs to mitigate against the headwinds at npower.

The company plans to cut around 900 jobs in the course of this year, having started talks with staff and unions last month. At the end of 2018 npower had a workforce of around 6,050 people.

Innogy also said profits in the UK will be hit by the new energy price cap and higher regulatory costs.

Last July, the Government passed a law setting a price cap for standard variable tariffs for gas and electricity, which is to last until the end of 2020, with an option to extend it by a further three years.