Mild weather hits Centrica profits

Energy giant Centrica today said mild spring and autumn weather had fuelled a 30 per cent slide in profits at its residential arms – British and Scottish 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 per cent drop in average household gas consumption and a 4 per cent fall in electricity.

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

Centrica, however, reported a 1 per cent increase in adjusted operating profits to £2.41 billion as its upstream gas and oil exploration business – which includes the former Venture Production unit – saw profits jump 33 per cent to £1bn.

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 per cent higher at £264m.

The upstream business smashed through the £1bn barrier for the first time, recording a 33 per cent increase in profits to £1.02bn, 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 per cent 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”.