Energy firm Npower has reported a 38 per cent drop in profit for the first six months of the year.
The company, owned by German energy giant RWE, explained that the significant reduction in its financial standings was down to an increased spend on improving customer service. Npower also noted that the cost of the government's energy efficiency scheme has meant it has had to spend more. Overall profit before tax and interest payments on debt fell to £109 million, from £176 million a year earlier.
Npower stated that its drop in overall profit represented just £14 per customer. Parent company RWE also endured a disappointing opening six months of 2014 reporting a 40 per cent drop in operating profits. It warned that the poor performance could affect the rest of the energy industry with possible closures of coal and gas power stations. RWE stated that low wholesale prices were making these sites unprofitable.
Releasing its financial results, Npower said: "Since the end of last year the company has substantially cut the number of customers who are billed late, and is now billing 96 per cent of its customers on time. Total number of complaints received by Npower in Q2 2014 has been reduced by over 18 per cent compared to Q1."
Npower's decision to invest in customer service comes after the company lost 62,000 of its household customers in the last year alone. July saw the firm receive 121,662 complaints and while it was a reduction from the 132,821 in May, it was still a major cause of concern for one of the big six energy suppliers.
The company received many more grievances than any other energy firm in the UK and was given an ultimatum by Ofgem. The organisation must now reduce the number of households affected by late billing by 100,000 by the end of August.
Find up to date information on spread betting strategies at City Index