By Nina Chestney
LONDON, Jan 29 (Reuters) - Octopus Energy Ltd is now the
fifth biggest power supplier in the UK after taking on new
customers which increased its revenues last year following the
collapse of smaller suppliers.
Octopus reported energy supply revenues of 1.9 billion
pounds ($2.6 billion) to April 30 2021, versus 1.2 billion in
the same period a year before, as its customer base rose to 2.1
million, it said in full-year results on Saturday.
The privately held company, part of the Octopus Energy
Group, now has more than three million customers, ranking it the
fifth largest energy retailer in the UK after Centrica's
British Gas, OVO Energy, E.ON, and EDF's EDF
Energy.
Octopus posted an operating loss of nearly 85 million pounds
last year, compared to a loss of nearly 50 million in 2020,
which it said reflected continued re-investment.
After taking out customer acquisition costs and
exceptionals, the loss was around 1 million pounds, it added.
Natural gas and power prices in Europe have spiked this year
as economies reopened from COVID-19 lockdowns and high demand
for liquefied natural gas in Asia pushed down supplies to
Europe.
More than 25 British suppliers have collapsed since the
start of 2021 due to rising wholesale gas and power prices, poor
forward power sales hedging and because a price cap prevented
them from passing on rising costs to customers, forcing millions
of households to be passed onto new suppliers.
"The company expects to incur around 100 million pounds of
losses as it absorbs the impact of the energy crisis on behalf
of customers," Octopus Energy Group said in a statement.
Octopus Energy Ltd, which supplies gas and renewable
electricity, said it follows a sophisticated hedging policy,
making forward commitments for power and gas delivery for each
customer that is acquired or renewed onto a fixed price
contract.
Traditional suppliers hedge their customers’ needs well in
advance, but some of the smaller players avoided that strategy
to give them greater price flexibility to try to profit from
arbitrage between wholesale and retail prices.
Octopus Energy Group, backed by Octopus Investments, said it
halved its operating loss across the group to 31 million pounds
last year from of 63 million pounds in 2020.
The group's revenues increased by 62% year-on-year to 2
billion pounds due to energy supply growth and licensing from
its software and technology platform, Kraken.
It also said it has acquired Plüm énergie, a French start-up
firm which currently looks after almost 100,000 energy accounts,
from retail customers and large companies to local authorities.
($1 = 0.7453 pounds)
(Reporting by Nina Chestney; editing by Susanna Twidale and
Elaine Hardcastle)
Centrica (CNA)