Energy giant under fire over profit leap

Utility giant EDF fuelled questions over mammoth energy profits today after it revealed a £1.7bn earnings haul just two months after hitting 3.7m British households with a hike in bills.

The French-owned supplier said UK underlying profits leapt 7.5 per cent in 2012, but insisted its gas and electricity residential arm remained loss-making, with the performance driven instead by the generation business.

Details of the profits rise will not sit well with EDF’s domestic customers, who saw bills rise by 10.8 per cent on average in early December.

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The results also come after EDF was named by regulator Ofgem as the most complained about of the “big six” energy firms at the end of last year. EDF received 8,072 complaints for each 100,000 customers in the final quarter of the year, while in March last year its sales tactics came under fire after Ofgem found the group’s staff had been making misleading claims to customers, leading to a £4.5m settlement.

Revenues at EDF’s UK arm rose 6.4 per cent to 9.7bn euros (£8.4bn) in 2012.

Adam Scorer, director of policy at Consumer Focus, called for greater transparency between prices and profits in the utility sector.

“Greater transparency about industry costs and company profits is going to be critical if consumers are to have confidence in an energy market where prices just seem to go one way,” he said.

EDF said the UK profits followed a leap in generation output last year, with its best performance from nuclear operations in seven years and a 37 per cent jump from its coal-fired plants, helped also by rising wholesale prices.

The generation arm, which accounts for 95 per cent of UK earnings, has been offsetting losses at its residential UK business, which fell into the red by £124m in 2011. EDF added it re-invested £1.3bn into its services and nuclear and coal stations, up £200m on 2011.