Centrica’s profit doubles as British Gas takes on 700,000 customers

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Britain’s largest energy supplier Centrica (CNA.L) reported a doubling in adjusted profit for 2021 and said its British Gas brand had taken on about 700,000 customers after the collapse of rivals hit by soaring energy costs amid a cap on prices.

That cap is being lifted by a record 54% from April, providing relief to suppliers but piling the pain on households.

Centrica, whose British Gas brand had around 3.4 million customers at the end of 2021, said it was too early to say what impact Russia’s invasion of Ukraine would have on long term energy prices in Britain.

Prompt wholesale British gas prices leapt around 30% on Thursday morning on news of the invasion.

“I don’t think its helpful to speculate on an unfolding situation,” Group Chief Executive Chris O’Shea told journalists during a briefing.

After losing customers to a flurry of new suppliers and then suffering a sharp drop in demand at the start of the COVID-pandemic, Centrica has been simplifying its business to focus on energy services and selling energy production assets.

However, the competitive landscape is changing after record wholesale energy prices forced about 30 British energy suppliers to leave the market over the past 12 months.

Centrica, which paused dividends in 2020, said it would not propose a full-year payout for 2021 but that it was now on a clear path to start paying a dividend.

The company said its 2022 outlook was broadly positive and its strong balance sheet meant it was well placed to handle continued volatility in wholesale commodity prices.

O’Shea said Centrica had paid back 27 million pounds to the government for furlough payments received during the pandemic and he had not taken a bonus for the year worth more than 1 million pounds.

Adjusted operating profit for 2021 rose to 948 million pounds ($1.28 billion), from 447 million pounds the previous year, helped by divestments and high energy prices.

Centrica sold its North America-based Direct Energy division in early 2021 for $3.6 billion to U.S. integrated power business NRG Energy.

Analysts said the results were positive, but the company’s shares were down around 4% as stock markets worldwide were hammered by Russia’s invasion of Ukraine.

(This story has been refiled to fix typo in paragraph 12)

SOURCE: REUTERS

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