Expansion costs eat into Energia’s annual profits

The cost of entering the residential electricity market in 2014 contributed to pre-tax profits at Energia decreasing by 37.5% to €16.7m.

Newly filed accounts for Energia — trading as Viridian Energy Ltd — show that the firm recorded the drop in profit as revenues declined from €861m to €850m in the 12 months to the end of last March.

According to the directors’ report, revenues decreased as a result of “lower retail prices associated with lower commodity prices”.

In 2014, Energia entered the residential electricity market and, as of the end of last March, had 56,000 residential customers compared to 10,000 the year before.

The directors confirmed that the company supplied 26% of the non-residential electricity market by volume in 2015 — unchanged from 2015.

The number of Energia’s business customers declined from 53,700 to 49,000.

During the year, the company paid a dividend of €30m to its parent, Viridian Power and Energy Holdings Ltd and this followed a dividend payout of €41m in 2014.

The directors said that an operating profit decline from €29.17m to €22.94m reflected costs of entering the residential electricity and gas market, lower contribution from renewable Power Purchase Agreements associated with lower wind factors, lower market prices and lower sales volumes.

The drop in profits last year includes finance costs of €2.55m incurred in the refinancing of the Viridian Group.

On the firm’s future plans, the directors state that “the company will continue to increase its presence into the Irish residential market into the 2015/16 financial year”.

After the post-tax profits of €14.6m and the dividend payout is taken into account, the firm’s accumulated profits at the end of last March was €32m.

Staff costs increased from €2.37m to €3.23m with numbers employed last year increasing from 34 to 36.

Aggregate remuneration for the company’s three directors; Siobhan Bailey, Gary Ryan and Garrett Donnellan last year topped €1.1m.

This was made up of €573,000 in remuneration, including pensions, from Viridian Energy Ltd with an additional €534,000 in remuneration from other Viridian firms.