Scottish Power profits up despite losing 100,000 customers

Scottish Power has reported a rise in third quarter profits after its generation and supply business continued to rebound from a poor performance in 2017.

The earnings boost came despite the company losing roughly 100,000 gas and electricity customers over the three months to the end of September.

Profits were up all three of its main divisions. Total earnings before interest, tax, depreciation and amortisations (EBITDA) grew by almost a quarter to around £1,027 million.

The generation and supply business saw by far the biggest increase, with profits more than quadrupling to £170 million. This compares to EBITDA of just £33.3 million for the third quarter of 2017.

Over the nine months to the end of September, electricity consumption was up 2.7 per cent when compared to the same period in 2017, whilst gas consumption was up 1.8 per cent. The supplier ended the third quarter with roughly 4.9 million customers.

After posting a profit margin of -0.3 per cent on gas and electricity sales in its most recent full-year results, Scottish Power said it is aiming to raise the figure to a more “typical” level of between 3 and 4 per cent in 2018.

In April, the company announced a 5.5 per cent increase in the average price of its standard variable tariff for duel fuel customers which took effect at the start of June.

Meanwhile, Scottish Power Renewables has reported a 19 per cent increase in EBITDA to £266.7 million. Wind output swelled by 7 cent to 3,153 GWh following the completion last year of eight onshore windfarms in Scotland with a combined price tag of £650 million.

SP Energy Networks saw a more modest 4 per cent rise in EBITDA to £591.1 million.

Earlier this month, Scottish Power announced the sale of its remaining conventional generation assets to a subsidiary of Drax as part of a deal worth £702 million.

“Our move to 100 per cent green electricity generation will take a major step forward in Q4, as we anticipate the sale of the generation business to Drax to finalise, following the necessary approvals from Drax shareholders,” said Scottish Power chief executive Keith Anderson.

“Over the rest of this year and in to 2019 we will be focused on delivering greener electricity for our customers, from offshore and onshore wind as well as new solar developments.”

He continued: “In terms of renewables so far this year, our recent investment in onshore wind has helped to deliver an increase in wind power production. Our largest UK investment project – the construction of the £2.5 billion East Anglia One offshore windfarm – is also progressing well. We expect first generation of electricity next year.

“Networks continue to deliver major investments and the business is performing in line with expectations. We are delivering a smarter and more robust grid system to support renewable energy connections, and to ensure the network can meet the challenges associated with the expected increase in electric vehicles.”