Npower says impact of billing problems to continue to 2016

Energy giant Npower says problems with its billing system have again dented profits and the financial impact will continue until the end of 2016.

Npower also said it had lost customers and had had to offer more favourable terms in an attempt to retain those whose contracts had expired.

Its parent company, Germany's RWE, said Npower's half-year profits were down 60% to €53m (£38m).

A switch in its billing system led to a surge in errors in recent years.

Problems included some customers receiving multiple bills and others receiving none.

Last year, Npower said that it was getting on top of these problems, which helped to dent last year's profits by 38%.

But last month, the Energy Ombudsman ordered Npower to give free energy to those customers who had waited too long for the company to deal with their complaints.

Among the major energy firms, Npower received the most complaints in 2014, Ofgem figures showed.

It said it had been struggling to retain customers: "We were often only able to retain residential customers with expired contracts by offering them new contracts with more favourable conditions."

The UK supply unit accounts for 6% of RWE's business.

RWE reported first half operating profits down 11% to €2.03bn, and it warned full-year UK operating profits would be below last year's €227m.