No evidence of ‘additional profits’ at Eneco, Essent and Vattenfall

Last year, the three energy companies achieved a net margin of between 0 and 5% of turnover, reports the supervisor. This is the money that remains after deducting all costs for the energy supplier, such as purchase, risk surcharge and delivery costs.

An energy company also has certain fixed costs, such as salaries and accommodation. What remains with the company after that is the profit, so last year a maximum of 5% of the turnover. ACM does not provide exact figures, as these are confidential.

Math

Let’s do some math to figure it out. Eneco did it in 2021 a turnover of more than 5.2 billion euros. Suppose the company had the same turnover last year and the maximum profit margin of 5%, then it is 260 million euros.

As impressive as the fictitious amount may seem, if it had already been reached, profits were lower than expected last year, concludes ACM after investigation. This is due to the fact that companies had to bear additional costs for the purchase of energy.

Repeat customers stayed longer

They were then unable to pass on these costs because customers with an open-ended contract stayed longer than expected. Eneco, Essent and Vattenfall had to purchase additional energy for these customers, even though prices had already increased.

From mid-January, the department conducted four weeks of research in the three companies with a team of more than 35 employees. External financial experts were also hired. Company offices were visited to review the books to verify what companies are spending on purchasing energy and what strategy they are using.

Purchasing strategy

According to the ACM, this strategy is an important explanation for the fact that energy tariffs for consumers are still quite high, while the price of gas on the international energy market has fallen sharply. This causes raised eyebrows among consumers, but can be explained, according to the regulator.

The energy you receive today has already been purchased. At the price that applied at the time, explains ACM. And so there are always a few months between the decline that we see on the international energy market and the prices that energy suppliers offer their customers.

Since the three energy companies use different purchasing strategies, the tariffs always differ. Some companies buy shorter in advance than others. And the closer the delivery date, the more the price of energy follows the wholesale price.