Guernsey Electricity reports £2.2m. operating loss for 2022
GUERNSEY ELECTRICITY reported an operating loss of £2.2m. for 2022 – an increase on the previous year’s figure of £0.6m.
In its latest annual report the company attributed its increased loss to various factors, including a reduction in imported electricity of 3.7% and a fall in sales of 4.3%.
Chief executive Alan Bates said that electricity sales revenues were not yet reflecting the full impact of tariff increases from 1 July 2022.
The year saw increased operating costs across several areas of the business. The most significant of these related to fixing problems following the introduction of a new enterprise resource planning and billing system. It was brought in to replace obsolete systems in 2019, but was hit with widespread challenges.
‘We acknowledge the difficulties this has caused to many of our customers and have worked hard during this year to improve the timeliness and presentation of invoices,’ said Mr Bates.
‘In addition to the public discussion, the project has also been a great internal disrupter, and I am grateful to all staff for working through the issues in challenging circumstances.’
After pension fund settlements the utility recorded a pre-tax operating profit of £3.4m., up from £0.4m in 2021. Mr Bates said this was down to ‘significant non-cash items accounting for pension fund movements and the valuation of derivatives’.
‘These elements provide considerable income to the profit and loss statement. [They] are accounting adjustments rather than being reflective of the underlying operational performance of the company.’
Mr Bates said GE’s pension liabilities had turned around from a deficit of £15.8m. in 2021 to a surplus of £4.8m. in 2022. This followed an increase in the corporate bond-based discount rate from 1.9% at the end of the 2021 financial year to 4.9% in 2022.
‘[This] results in a significant reduction in pension liabilities,’ he said.
‘This strengthens the balance sheet position. However, again, is not reflective of operational performance and for this reason the board remains concerned to ensure a tariff pathway is developed suitable for future investment needs.’
The report stated that the company’s net debt was £36.4m. Mr Bates said this presented ‘considerable maintenance demands on a business with turnover of £59.1m.’.
The utility will introduce a 13% price rise in July.
