Centrica enjoys cold weather boost

24th Feb 2011 06:01

Profits soared at British Gas owner Centrica in the year to 31 December as the cold weather towards the end of last year forced homeowners to crank up the heating.Pre-tax profits climbed to £2.8bn from £996m the previous year on revenues that rose to £22.4bn from £22bn.Revenues in the UK downstream business were up to £1.2bn from £1bn, while UK upstream revenues rose to £711m from £525m. Storage UK revenues were broadly flat at £169m and North America revenues rose to £234m from £153m.British Gas, which lifted gas and electricity tariffs by 7% last year, added 267,000 residential energy customers during the year "reflecting our competitive pricing position" but second half profits were hurt by rising wholesale energy prices, the company said. The company said it made a record number of call-outs during the cold weather late last year.The rise in profits prompted the usual criticism that Centrica is benefiting from the crippling prices it imposes on customers.Mike O' Connor, chief executive of the customer watchdog Consumer Focus said: "We need successful energy companies, but consumers may look at today's profits and at recent prices and question how one justifies the other."Centrica said that wholesale gas prices stayed low during the first quarter of 2010, but then rose sharply. Gas prices were around 40% higher in the fourth quarter of the year than in the first quarter "contributing to substantially lower margins in our downstream supply business in the second half of the year."The upstream gas and oil business lifted production by 43% and enjoyed excellent drilling success, but was impacted by lower wholesale prices in North America. Overall the North American business saw a significant improvement, particularly in residential and business energy supply.Centrica said it has a full programme of investment planned for 2011, with two-thirds of this earmarked for the UK upstream business."In 2010 we delivered a strong operational and financial result, reflecting the contribution from the enlarged upstream business in the UK, together with good downstream performance in both the UK and North America," chief executive Sam Laidlaw said. "Our investment programme for 2011 and beyond will enable continued growth for the benefit of all our stakeholders, offering a competitive deal for customers, creating further job opportunities, and delivering superior financial returns for our shareholders."