CENTRICA, the UK’s largest energy supplier, said pre-tax profits dropped by 19 per cent in the first half of the year after higher wholesale prices and warmer weather took its toll on its residential energy business.
The utility firm saw its adjusted operating profits fall to £1.26bn in the six months to 30 June, which wiped out a slight rise in its upstream businesses to £414m.
Higher commodity prices and significantly lower energy consumption due to warmer seasonal temperatures led to a 54 per cent drop in operational profits in the residential business arm of British Gas.
“The first half was pretty turbulent,” finance director Nick Luff said yesterday, citing unrest in the Middle East and the earthquake in Japan.
“Services faced a tough environment both competitively and with the economy impacting consumer confidence,” he said in a news conference.
Centrica announced last month that it would raise gas and electricity prices by 18 and 16 per cent respectively in August, pushing up the average bill for around 9m customers by £190 a year.
“Without the August price rise, this would have wiped out a large part of £270m profit,” the company pointed out in the report, adding that it had sold energy at a loss since April.
The firm rewarded investors, however, with a 12 per cent rise in interim dividend to 4.29p.
On Wednesday British Gas was fined £2.5m by the energy regulator Ofgem for failing to address properly customer complaints, its second fine in less than a month.
Centrica shares fell 2.3 per cent to 313p last night.