Mild weather hits Centrica profits

Feb 23 2012

Energy giant Centrica said mild spring and autumn weather had fuelled a 30% slide in profits at its residential arm British Gas to £522 million last year.

The UK's biggest gas supplier, which lost 97,000 customers in 2011, said the unseasonably warm weather in spring and autumn led to a 21% drop in average household gas consumption and a 4% fall in electricity.

The slide in profits for the year to December 31 comes despite the energy supplier hiking gas and electricity bills by an average of 18% and 16% respectively in August. It has since announced a 5% cut in electricity prices in January.

Centrica, however, reported a 1% increase in adjusted operating profits to £2.41 billion as its upstream gas and oil exploration business saw profits jump 33% to £1 billion.

Some of the fall in profits in supplying gas and electricity to households has been clawed back through residential services such as boiler repairs, where profits were 10% higher at £264 million.

The upstream business smashed through the £1 billion barrier for the first time, recording a 33% increase in profits to £1.02 billion, after benefiting from higher wholesale commodity prices and a good production performance.

The company claims it has invested £1.80 for every £1 it has earned over the past five years. Its dividend for shareholders increased 8% to 15.4p a share.

Chief executive Sam Laidlaw said it had been a tough year "both for Centrica and our customers", but that the company was still making the investments "on which Britain's energy future depends".