EDF profits spark calls for further energy price cuts
‘BIG six’ energy supplier EDF has fuelled questions over the fairness of its prices after it revealing a jump in profits despite a drop in sales.
The French utility giant, which supplies electricity and gas to around 5.5million residential and business customers, reported underlying earnings of �1.6billion in the UK in 2011, up from �1.4billion the previous year.
However, revenues were down to 8.6billion euros (�7.1billion) in the UK in 2011, from 9.4billion euros (�7.7billion) the previous year, as households used less gas over the milder winter.
EDF said underlying earnings were boosted by increased nuclear output and a drop in wholesale gas prices, but consumer groups said this would leave customers confused.
Audrey Gallacher, director of energy at Consumer Focus, said: “EDF Energy’s UK profits have risen despite lower energy use in the milder winter. This will leave many customers wondering whether energy prices can, and should, be cut further.”
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She went on: “We need successful, profitable companies. But consumers need to know big profit margins are not being made needlessly at their expense.”
EDF cut its gas bills by 5% from February 7 after wholesale costs fell by 9% and sparked a series of reductions by rival suppliers. However, the cut came after EDF increased gas tariffs by 15.4% in November.
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Which? executive director Richard Lloyd said: “When people see energy suppliers announcing increased profits despite a mild winter, they’re bound to question whether they’re paying a fair price.”
He added: “The energy companies must raise their game and demonstrate their commitment to giving consumers the best price for their energy. If they do, it could be the start of a better relationship with their customers.”
The results come a week before British Gas owner Centrica publishes its annual figures, in which it is expected to reveal a 4% increase in adjusted operating profits to �2.5billion.
However, the company is expected to reveal a 25% drop in British Gas profits to �550million, which would be the lowest level in three years.
British Gas cut bills for more than five million customers in January by announcing an average 5% drop in its standard electricity tariff.
The price cut came six months after the company increased gas bills by 18% and electricity by 16%.