RWE has hailed a turnaround at its npower subsidiary in Britain, after winning back customers and reporting a 60% decline in complaints.
Npower, one of Britain’s big six energy companies, signed 100,000 domestic customers in July after losing a similar number between January and June. In the year to June, it had lost 350,000 accounts.
The exodus of customers last year was exacerbated by billing issues that prevented the energy company from charging clients. Its German parent, RWE, Germany’s second biggest utility company, responded with a shakeup of senior management at npower and embarked on a two-year restructuring plan.
This appears to have paid off: the latest gains mean the total number, including business accounts, has risen to 5.2m, up from 4.78m at the end of last year.
Unveiling first-half results, RWE’s chief executive, Peter Terium, said npower restructuring had “got off to a good start”, adding: “We’re a bit ahead of plan.”
He added that npower’s position had stabilised since the significant customer losses last year. He also said he thought the fallout from Britain’s decision to leave the EU would be manageable.
Its bigger rival British Gas lost almost 400,000 customers in the first six months of 2016. Its parent, Centrica, said falling gas and power prices had brought new suppliers to the market, who had encouraged households to switch. The 3% fall in domestic customers left British Gas with 14.26m accounts. However, customer numbers started rising again in June.
At npower, the number of complaints dropped 61% to 175,159 in the first six months of 2016, while late bills were down by a third, to 65,701. In December, npower was fined £26m for sending out late and often inaccurate bills and failing to handle customer complaints effectively.
Paul Coffey, who replaced Paul Massara as chief executive of npower a year ago, said: “We are starting to serve our customers better with much fewer customer complaints and much simpler processes. The recovery plan announced in March is beginning to bear fruit and we are delivering a solid performance on customer acquisition and retention versus our competitors for the first half of this year.”
In March, npower announced plans to slash 2,400 jobs, a fifth of its 11,500-strong workforce, to reduce costs. It slumped to an operating loss of £99m for 2015 at its domestic energy business, compared with a profit of £183m a year earlier.
Coffey admitted that “there is much more to do”. Npower is expected to return to full-year profit by 2017. It made a £67m profit in the first half of this year.
Britain is RWE’s second biggest market by customers after Germany. Npower accounts for about a fifth of RWE’s sales.
Its parent company posted a 7% drop in first-half operating profits to €1.9bn (pdf) (£1.64bn), missing analysts’ expectations, and blamed losses at its volatile trading business. RWE stuck to its outlook, with operating profit forecast to fall to between €2.8bn and €3.1bn this year.
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