Centrica earnings heat up

published 27 February 2013

Energy company Centrica said 2012 earnings rose as cold weather during the year pushed up gas consumption.

Adjusted earnings climbed 5.0% to £1.4bn, or 27.1p per share, for the year to December 31st, 2012 as domestic gas consumption increased 12%.

Revenues also grew 5.0% to £23.9bn while total adjusted operating profit jumped 14% to £2.7bn.

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The group said strong operational performance, acquisitions and progress in achieving its goals to build a more sustainable, vertically integrated and customer focused business drove results.

During the year Centrica set out to grow British Gas, acquire upstream assets on value creative terms and expand its North American activity.

British Gas operating profits jumped 9.0% to £1.1bn as the business unit took the lead in simplifying tariffs and implementing changes consistent with Ofgem's proposals for retail market reform.

Centrica invested £2.0bn in upstream assets in helping to secure gas supplies for the UK. First power from the Lincs offshore wind farm was realised while the firm extended the life of its existing nuclear fleet.

North American business expanded through a strategy of operational efficiencies, organic growth and new customers. The group anticipates that it is on its way to doubling profitability since 2009.

The company raised its full-year dividend to 16.4p, up 6.0% from 15.4p in 2011.

Chief Executive Sam Laidlaw said cold weather contributed to higher energy bills for consumers and material changes in the regulatory environment but the team handled the challenges to see the company through a strong year of performance.

"We have taken the lead during 2012 in helping more households save energy and supporting the people who need the most help," he said.

"It's important that Centrica makes a fair and reasonable return so that we can continue to make our contribution to society and to invest. Last year we incurred a tax charge of over £1.0bn and invested over £2.0bn to secure new sources of energy for the UK, well in excess of our profits."

Looking ahead, the company will continue to invest in projects that wield high returns while remaining cautious of difficult market conditions.