The UK arm of energy giant Eon has returned to the black for the first time since 2020 after a swing of more than £700m.
The division has posted a pre-tax profit of £49m for 2023, according to newly-filed accounts with Companies House, up from a loss of £659m.
The surge comes as Eon’s turnover also jumped from £2.862bn to £3.385bn over the same period.
The company said the surge into the black was mainly due to the impairment of investments in subsidiaries of £663m in the prior year with was partly offset by dividends received from subsidiaries of £120m.
The UK arm includes a district heating project in London which generated a turnover of £4m in the year while it made a pre-tax loss of £2m.
It also includes its structured trading segment which consists of purchasing power generated by wind farm operators and renewable-related trading activities and a contract to supply wholesale power and gas to a third party energy supply company.
That division’s turnover totalled £3.381bn, up from £2.858bn, an increase Eon said was mainly because of an increase in revenue from its wholesale power and gas supply contract and the provision of renewables obligation certificates to the group.
‘Improved market conditions’ help Eon UK
The structured trading segment made a pre-tax profit of £140m, up from a loss of £81m, which Eon said was because of the “improved market conditions impacting the power purchase arrangements and contract based provision relating to certain contractual obligations established in the prior year”.
The UK arm also includes central support services which deliver facilities management, human resources, procurement, insurance, property, legal, IT and finance support to other Eon companies operating in the UK.
The division generated a pre-tax loss of £89m in the year, compared to a loss of £578m in 2022.
Eon said this was because the prior year included an impairment of an investment and was offset by dividend income received from subsidiaries.
In a statement signed off by the board Eon said: “The directors believe that the present level of operational activity for the structured trading and other segments will be generally sustained during 2024.
“The operational activity of the UKS segment is expected to decrease following the completion of the expected sale of the district heating scheme to a fellow group undertaking during 2024.”
The wider Eon group announced in March that its sales had dipped from €115.6bn to €93.6bn in 2023 while its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) went from €8bn to €9.3bn.