Centrica sees profits slump in downturn
CENTRICA said yesterday its first-half profits had dropped 5.6 per cent but that a good performance at British Gas had offset weak commodity prices.
Operating profits at British Gas jumped 56 per cent to £476m on the back of low commodity prices and a cold snap in January and February.
Centrica said its British Gas Residential arm had just over 15.5m customer accounts at the end of last month, down from the 15.6m it reported at the end of December.
Revenues at British Gas for the first half were up 15 per cent to £4.38bn, the company added.
Centrica gave no update on progress in its bid for North Sea gas producer Venture Production, but said the company was in talks over other deals regarding gas production.
“We do have a number of bilateral negotiations ongoing that could easily replicate the opportunities that we see with Venture,” chief executive Sam Laidlaw said.
The hostile bid has met with opposition from Venture’s top shareholders. The company added that it was seeing a reduction in gas demand this year as the recession forces households to cut back on consumption and as energy efficiency measures take effect.
“Average gas consumption is down six per cent year-on-year and electricity is down one per cent but we compensate for that with our services business, which is growing strongly,” Laidlaw said.
Sales at Centrica for the first-half were up to £11.6bn versus £10bn on the same period a year earlier, while operating profit fell to £936m from £992m in the six months.
Centrica said any further cuts in prices for household customers would depend on the weather, the situation in Ukraine and winter prices, which are currently high.