Energy costs contribute to €13m loss at Airtricity

INCREASED ENERGY costs left electricity and gas supplier Airtricity with a €13 million loss last year.

Airtricity supplies electricity and gas to businesses and consumers in the Republic.

The company competes with State-owned ESB and Bord Gáis in the consumer market and also supplies businesses and industry.

Returns just filed show that revenues in the 12 months ended March 31st, 2011, its financial year, grew by over 60 per cent to €511 million from €315 million in 2010.

However, its costs increased by almost 80 per cent to €486 million last year from €263 million during its 2010 financial year.

The company lost €13.6 million before tax in 2011, compared with a profit of €28.4 million the previous year.

The directors’ report states that the company had 280,000 customers by the end of the financial year.

“The consequent increased demand led to an increased exposure to international energy price fluctuations,” the report says.

“Higher energy costs combined with customer acquisition costs contributed to the loss during the year.”

Airtricity supplies its customers by generating electricity from its wind farms and by buying power on the open market from other generators operating in Ireland. It purchases all the natural gas it supplies on the open market.

World oil and natural gas prices drive electricity costs as these are the principal fuels used in its generation. Both oil and gas prices began to increase in late 2010 and rose sharply early last year in the wake of the Libyan revolution and the growing agitation for democracy across Arab states that are large oil producers.

Oil prices hit $116 a barrel on world markets a year ago and subsequently moved close to $120 a barrel.

Electricity suppliers would have seen their costs rise as a consequence, but may not have been in a position to pass the extra expense back to customers with whom they had already agreed a fixed price for a set period.

Most electricity companies increased their prices later in 2011 to compensate for their own increased costs.

The company’s balance sheet ended the year in good shape. Net assets on March 31st were €46 million, down from €58 million a year earlier, this was accounted for by a fall of €12 million in the profit and loss account. It had €11 million in cash.

Airtricity, which operates from offices in Sandyford in south Dublin, employed 216 staff in 2011.

Airtricity’s ultimate parent is Perth-based utility, Scottish Southern Electricity plc, which has operations in Britain and across Europe.

The Irish business is a direct subsidiary of a holding company, SSE Renewable Holdings, a Dublin-registered entity.