SCOTTISHPOWER won big from the latest big freeze as the Beast from the East sent customer demand soaring.
The Glasgow-based giant has revealed a near-250 per cent earnings rebound in its retail supply arm.
First quarter underlying earnings in its generation and supply arm rose to £131.7 million as freezing conditions forced consumers to keep heating high in late February and early March.
Heavy snow blanketed the country, keeping workers and families at home as offices and schools kept their doors shut. As much as 44cm fell in Bishopton, Renfrewshire, where the highest accumulation was recorded.
The numbers were warmly welcomed by the company after mild conditions a year earlier caused earnings in the division to crash.
Keith Anderson, chief executive of the “Big Six” supplier, said: “The improvement in generation and supply follows a very difficult 2017, which delivered one of the weakest performances for the business in the last decade.
“The first three months of the year has seen the business recover to a level just below the first quarter in 2016.
“With the price cap pending this year, we still expect a challenging environment for the retail business in 2018.”
The news comes less than one week after the firm announced a price increase for around 950,000 households.
Standard variable gas and electricity prices will go up for around a third of customers from June 1, with households affected facing an average increase of 5.5 per cent.
ScottishPower, owned by Spanish firm Iberdrola, this is due to an increase in wholesale energy costs, as well as costs associated with upgrading meters and delivering electricity from low-carbon sources.
Around 100,000 customers left the company in the first quarter, taking total accounts to five million.
This follows the loss of around 200,000 accounts last year.
Meanwhile, the wider Iberdrola group reported an underlying earnings boost of almost 25 per cent.
Figures hit £2 billion in the first three months of 2018, fuelled in part by the improved UK performance.
Net profits also rose by 1.2 per cent to £733m.
The parent firm said the success was “despite the negative impact of the exchange rate” and reported an increase of 14 per cent in capital expenditure to March of more than £1bn.
Three-quarters of that spending was funnelled into networks and the renewable energy business, including operations in Germany.
In the UK, ScottishPower Renewables generated almost 1700 gigawatt hours of electricity, up nearly 23 per cent on the same period last year.
Most of this generation – 32 per cent – came from offshore facilities and the “favourable” wind conditions blew the gross operating profit up by one-third, or almost £29m.
Reaffirming its forecasts for the year, Iberdrola said new tariff frameworks in America and Brazil will “boost the networks business”, while higher output and an increase in both hydroelectric reserves and wind conditions “will improve the performance of the renewables area”. It expects the pre-tax take to hit more than £10bn, achieving a net profit of close to £3bn for the full year.
The group said: “Generation and retail activities will benefit from the positive effects of the increased demand, the new capacity, and higher output.”
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