Earnings surge for utility giant ScottishPower

Fresh from hiking prices for hundreds of thousands of customers, ScottishPower has reported a surge in profits at its energy supply business.

Underlying earnings at the generation and supply unit soared by more than 300% to £165.8m. Picture: Chris James

The utility giant said underlying earnings at its generation and supply unit had soared by more than 300 per cent to £165.8 million in the six months to the end of June. It added that the division had “recovered” from a poor performance in 2017.

Average customer consumption increased by 4 per cent year-on-year over the period, which was mainly due to cold weather from the Beast from the East around late February and March.

Customer numbers now stand at about 4.9 million, down from the five million reported at the end of the first quarter of 2018.

The latest figures come after the Big Six energy company, which is owned by Spanish multinational Iberdrola, increased prices in a move that hit some 950,000 households.

The firm hiked its standard variable gas and electricity prices for around a third of its customers from 1 June, with impacted households facing an average increase of 5.5 per cent.

ScottishPower attributed the rise to an increase in wholesale energy costs, alongside costs associated with upgrading meters and delivering electricity from low-carbon sources.

The firm has been investing in wind power, having completed a £650m project to build eight wind farms north of the Border.

Over the first six months of 2018, ScottishPower also started construction on a major offshore wind farm in East Anglia, the East Anglia ONE project.

Underlying earnings at the ScottishPower Renewables business rose 27 per cent to £205.1m while they nudged up 3 per cent to £399.9m at the SP Energy Networks division.

The group has also completed the installation of one million smart meters. It is working with four installation partners across the UK, installing at peak 2,700 meters per day with a UK-wide workforce of more than 500 people.

ScottishPower chief executive Keith Anderson said: “Everyone knows that installing smart meters hasn’t been plain sailing for suppliers. Challenges have been overcome, with more to face, but it is a major achievement to reach one million installations.

“The potential for customers to reduce consumption and save money is only one benefit. As the energy industry becomes fully digital in the years ahead, the new meters will be a vital cog in a smart network that supports electric vehicle charging, manages locally produced renewable energy and even the storage of electricity at home.”

On the half-year results he noted: “All of our business areas are performing in line with expectations. Our investment in onshore wind last year has seen an increase in electricity generated, and excellent progress has been made on delivering the £2.5 billion East Anglia ONE project.”