Centrica makes up for slump in gas output

12th Nov 2009 07:02

Centrica is trading as expected, with the gas supplier's lower effective tax rate and strong performance from the UK downstream business offsetting a drop in gas production and profitability.Gas production fell 50% in the third quarter from the same time last year and is expected to be down by about 25% for the full year."Combined with lower average selling prices, this lower production will lead to profits from the upstream business this year being less than half of those recorded in 2008, despite the four month contribution from Venture," said the group.But the reduction in profits from the highly taxed UK upstream business will cut the company's effective tax rate to around 36% for the full year. The British Gas business has performed "well", with the number if Residential Energy accounts jumping by 200,000 between the end of June and the end of October to 15.7m.Centrica says it is on track to exceed its target of £100m of cost savings as its integration is "progressing well".Trading results from both Business Energy supply and from Services, where accounts rose by 100,000 to 8.3m, are ahead of expectations, with strong year on year growth expected from these and from Residential Energy."The principal variables impacting the group's trading results for the remainder of the year are gas consumption levels by customers, driven mainly by weather, and commodity prices," said Centrica. "Assuming normal weather patterns, and based on current forward commodity prices, the group's adjusted earnings are expected to be in line with current consensus."Results for 2009 are due on 25 February.