In 2017, npower’s revenue fell by £76 million due to “fierce competition” between suppliers.
This happened as customer switching in the UK reached its highest point for several years and margins for new acquisitions fell.
The firm’s pre-interest and pre-tax earnings increased by £34 million to £56 million over the year.
The energy company suggests this was thanks to its ongoing two-year plan to cut back on costs, which by the end of 2017 had delivered £162 million of actual savings.
The Big Six supplier says the proportion of its customers on Standard Variable Tariffs (SVT) stood at 47% at the end of 2017, compared to 54% at the end of 2016.
It adds domestic accounts dropped 155,000 due to a loss of customers in the first quarter following the implementation of the SVT price increase in March 2017.
Paul Coffey, CEO of npower, said: “Energy supply remains an extremely competitive market. Rising costs and the changing regulatory landscape, such as the proposed SVT price cap, present all energy suppliers with real challenges.
“Our focus, therefore, is on ensuring that npower is best placed to meet current and future customers’ needs and this is one of the key drivers behind our planned merger with SSE’s retail and energy services business.”