Last checked at 
LONDON (Alliance News) - Utility company Jersey Electricity PLC Wednesday said it doubled its pretax profit in the first-half of the year, as price increases offset a slowdown in revenues, electricity sales and pressure elsewhere in the business.
The electricity provider on the island of Jersey reported a pretax profit of GBP3.1 million for the six months to March 31, up from GBP1.4 million the prior year. The group proposed an interim dividend of 5.00 pence, up from 4.75 pence a year earlier.
During the period it booked GBP1.7 million in exceptional items, partly due to restructuring costs of its retail business, but largely as a result of having exchanged contracts to sell of its shareholding in Foreshore, its data hosting joint venture, of which it said an estimated loss of GBP1.1 million has been recognised.
The company said its retail operation had been facing increasing pressure on margins from UK on-line sales into Jersey.
Group revenues for the first-half was GBP55.0 million, down 3% last year's revenues of GBP56.8 million.
It said the costs of sales during the period fell by GBP5.8 million to GBP389.8 million, mainly due to the reduced use of oil for on-island generation in its energy business because of milder weather.
Unit sales of electricity in its energy division fell by 7%, to 354 million kilowatt-hours, from 381 million kilowatt-hours a year earlier, while revenues in its energy division fell only 3%, as a tariff rise in 2013 offset the volume shortfall.
"Mild weather in the financial year to date, against lower than average temperatures in the comparable period last year, resulted in a reduced use of electricity primarily in the heating of residential properties," the company said in a statement.
Jersey Electricity said its project to install a new underwater cable link with France, which is scheduled for early 2015, is on track and on budget, although it said that until it is installed, it is constrained on importation capacity and reliant on a heavier mix of more expensive on-island oil-fired generation, particularly in winter, when volumes are higher.
The utility company said it generated 20% of its electricity in Jersey, less than last year, and imported 75% of its on-island requirement from France, while the remaining 5% of its electricity came from the Energy from Waste plant, owned by the States of Jersey.
"We announced a tariff rise of 1.5% from 1 April 2014 to aid the recovery of the additional costs associated with the loss of our original interconnector to France in June 2012. In spite of these price rises, our tariffs continue to remain competitive with other jurisdictions," it said.
Jersey Electricity said that trading conditions remain challenging for its other non-energy business units. As a result it recently restructured its retail business, which has now been rebranded and is trading from a smaller footprint. The group said that profit and revenue in its property portfolio also fell in the first-half.
The group said it had net debt of GBP19.5 million as at March 31, as it continued to invest in infrastructure assets in its energy business. The group said it spent GBP20 million in capital expenditure in the first-half of the year.
"Our power purchase requirements are materially hedged for the period 2014-17 and foreign exchange out to 2016," the company said.
Jersey Electricity shares were up 2.6% at 330.00 pence Wednesday.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
