UK's Centrica posts lower interim profit as British Gas profits fall

By Susanna Twidale

(Reuters) -Britain's Centrica reported a fall in first-half adjusted operating profit on Thursday with profits at retail arm British Gas dropping due to lower energy prices and without a one off payment seen the previous year.

Wholesale energy prices have fallen significantly since 2022 and early 2023 after hitting record highs following Russia’s invasion of Ukraine.

“Our core businesses continued to deliver in line with our expectations in the first half of 2024, against the backdrop of more normalised market conditions,” CEO Chris O’Shea said in the results statement.

The largest source of the company’s profits was its infrastructure division, which includes its stake in upstream gas producer Spirit Energy, its energy storage sites and its 20% stake in Britian’s nuclear fleet.

Infrastructure profits were 522 million euros, down from 654 million in the first half of 2023 on lower energy prices.

Adjusted profits at retail arm British Gas Energy dropped to 159 million pounds from 969 million pounds in the first half 2023.

Centrica said first half profits in 2023 were swelled by around 500 million pounds due to changes in regulator Ofgem’s price cap which allowed the firm to recover costs lost during the energy crisis and had warned this would not be repeated.

It said the division was also hit by lower commodity prices and customer numbers also slightly dipped.

The energy firm reported a total adjusted operating profit of 1.04 billion pounds ($1.34 billion) for the six months ended on June 30, compared with 2.08 million pounds a year earlier.

The company said Chair Scott Wheway would step down after five years in the role and non-executive director Kevin O'Byrne would succeed him on Dec. 16.

Centrica increased its interim dividend to 1.5p from 1.33p and said its sharebuyback programme would be extended by 200 million to be complete by around February 2025.

($1 = 0.7760 pounds)

($1 = 0.7762 pounds)

(Reporting by Susanna Twidale in London, Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu and Sharon Singleton)