ScottishPower earnings hit by mild weather and fierce competition
ScottishPower lost around 120,000 customers year-on-year in the third quarter and some 80,000 since the end of June alone amid fierce competition.
Energy giant ScottishPower has revealed a 61% plunge in retail supply earnings as it continued to lose customers switching to cheaper deals.
ScottishPower, which is owned by Spanish group Iberdrola, saw underlying third-quarter retail supply earnings drop to £59.4 million from £152.3 million a year earlier.
It lost around 120,000 customers year-on-year in the third quarter and some 80,000 since the end of June alone amid fierce competition as many households have switched away from the Big Six in search of better deals.
The group said customer numbers stood at 5.22 million, down from 5.3 million in the half-year and 5.34 million a year earlier.
But ScottishPower boss Keith Anderson insisted the group was the only provider to increase its market share among the Big Six since 2011 – currently standing at 12.3%.
He also took aim once more at the Government’s rekindled plans for a price cap on rip-off standard variable tariff deals.
Mr Anderson said: “Our view remains that the proposed price cap will not help to engage those customers who could still find a better deal.
“It will be bad for consumers, energy companies big and small, as well as investor confidence.”
The Government announced last month that an “absolute cap” will be imposed on poor-value energy tariffs, but only as a temporary measure that will run until 2023 at the latest.
Regulator Ofgem will bring in a cap on standard variable or other default tariffs under draft legislation, although there are no guarantees it will take effect by next winter.
ScottishPower is among a number of major providers to pledge to end standard variable tariffs and move customers on to cheaper fixed price deals, although the price cap is still set to go ahead.
Mr Anderson said: “The key question the Government needs to answer is whether they still believe customers benefit most from free market competition.
“If they do, any intervention must be designed to increase consumer engagement, which is the biggest thing wrong in this sector.
“Otherwise, we would urge the Government to opt for a fully regulated market. We need clarity one way or the other.”
The firm’s third-quarter update showed its retail business was impacted by recent mild weather, with gas and electricity demand falling by 6.6% and 6.8% respectively.
Its UK generation business also had a tough three months, reporting a loss of £12.9 million against earnings of £34.8 million a year earlier.
Overall, earnings fell by 75% to £46.5 million for the UK generation and supply arm.
But the wider Iberdrola group saw an 18.4% rise in net profit to 2.41 billion euros (£2.1 billion) as a better international performance offset poor results in Spain.