PrepayPower’s net profit fell 40 per cent to €8.5 million last year as wholesale energy prices began to rise and the company reduced its margins on supply.
The domestic pay-as-you-go electricity and gas supplier said its profits would be lower again this year due to the “very significant increases” in wholesale costs seen in 2022 and a further reduction in margins.
PrepayPower increased gas and electricity prices three times in 2021, with gas prices rising a further three times this year and electricity prices four times. Several other electricity providers have also increased prices four times in 2022.
Notwithstanding the drop in profit, a dividend of €19 million was paid to parent company PrepayPower Group Limited “as part of a group reserve management programme”.
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No dividend was paid in 2020, a year in which it posted a profit of almost €14.2 million, though the directors of the parent company shared a dividend of €14 million in respect of 2019.
The business is majority-owned by corporate financier Ulric Kenny, with tech entrepreneur Andrew Collins and chief executive and co-founder Cathal Fay also holding stakes.
Accounts for PrepayPower Limited show turnover at the company rose 14 per cent to €226 million in 2021, which the directors said was the result of an increase in customer numbers and higher prices “necessitated by rising wholesale markets”. Its cost of sales surged 21.6 per cent to almost €186 million.
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The company said its margins had been “somewhat depressed” in 2021 as it sought to limit the extent to which it passed on to customers the higher wholesale prices seen in the final months of the year. Wholesale energy costs started to surge during this period due to lower Russian gas flows reaching Europe as well as low wind levels and outages at electricity generation plants.
“The company protected its customers from the full impact of these increases by using its hedging strategy and reducing its margins on supply. The business passed on some of the lowest customer increases in the market during 2021. This impacted profits for the year,” a spokesman said.
“Looking ahead, the company expects profits to be lower for 2022 due to very significant increases in wholesale costs.”
The company had about 167,000 electricity customers at the end of 2021, up 5,000 during the year, with gas customer numbers rising by 3,000 to 58,000. It also amassed 13,000 broadband customers, up 5,000, during the year.
PrepayPower is the largest provider of pay-as-you-go energy in the State — a supply mechanism that has come under increased political scrutiny this year as the energy crisis worsened in the wake of Russia’s invasion of Ukraine.
The company said it has now completed the distribution of the Government’s second €200 credit for residential electricity customers. This follows the application of the first credit last April.
It employed an average of 257 people last year, up from 251 in 2020, while directors’ remuneration arrived at about €930,000, the accounts show.
