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British Gas owner Centrica reports £1.3bn profit

Category: Scotland

Published: 28th Jul 2011 07:57:17

British Gas owner Centrica has reported operating profits of £1.3bn in the six months to 30 June, down 19% on the same period last year.

The results include a 54% fall in operating profits at its residential energy division, British Gas, to £270m.

British Gas says higher wholesale gas prices are responsible for the fall in profits.

The news comes as the firm prepares to raise gas prices by 18% and electricity prices by 16% in August.

The increase will push up the average bill for around nine million customers by £190 a year.

British Gas says it has been selling gas at a loss since April due to the rising cost of gas on the wholesale markets.

In its core business of home gas supply British Gas lost customers and market share compared with the same period last year.

Customer accounts for gas were down 0.7% from last year and market share down 0.5%, though it picked up customers for electricity supply.

But British Gas did record an increase in total customers in the period - up 159,000 to 16.1 million accounts.

Warmer weather also saw a big fall in residential gas use, down 18% on the previous year, and a 3% drop in electricity consumption, further hurting profits.

But British Gas's parent company, Centrica, is a major gas producer and sells gas on the wholesale market.

Profits from operations, which include production in the North Sea and Trinidad, increased by 14% to £414m.

Last month, Centrica announced it had mothballed its North Sea South Morecambe gas field, due to increased taxes.

The firm said the government's decision to raise offshore drilling taxes had made the field uneconomical.

However, it added the site would be brought back into operation once the wholesale gas price reached a level where it became economical again.

Source:
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BBC News, 2011. British Gas owner Centrica reports £1.3bn profit [Online] (Updated 28th Jul 2011)
Available at: http://www.ukwirednews.com/news/173584/British-Gas-owner-Centrica-reports-1-3bn-profit [Accessed 2nd Sep 2014]

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