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.<br /><br />Operating profits at British Gas jumped 56 per cent to &pound;476m on the back of low commodity prices and a cold snap in January and February.<br /><br />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.<br /><br />Revenues at British Gas for the first half were up 15 per cent to &pound;4.38bn, the company added.<br /><br />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.<br /><br />&ldquo;We do have a number of bilateral negotiations ongoing that could easily replicate the opportunities that we see with Venture,&rdquo; chief executive Sam Laidlaw said.<br /><br />The hostile bid has met with opposition from Venture&rsquo;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.<br /><br />&ldquo;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,&rdquo; Laidlaw said.<br /><br />Sales at Centrica for the first-half were up to &pound;11.6bn versus &pound;10bn on the same period a year earlier, while operating profit fell to &pound;936m from &pound;992m in the six months.<br /><br />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.