Centrica sees full year in line

Energy giant Centrica said it has performed well to date and expects full year earnings growth to be in line with market expectations as it starts its 500m pound share repurchase programme.

Energy giant Centrica said it has performed well to date and expects full year earnings growth to be in line with market expectations as it starts its 500m pound share repurchase programme.

FTSE 100-listed Centrica said trading has been buoyed by sustained cold weather and periods of higher commodity prices.

As a result of the unusual period of extended cold weather, average residential gas consumption was 18% higher in the first four months of 2013 than in the same period in 2012, it said. Average residential electricity consumption was 3% higher.

It expects the residential energy supply business to deliver an operating profit for the full year in line with expectations, weighted towards the first half.

The sustained cold weather also had an impact on its services business, with additional costs incurred in response to high call out levels.

Centrica said, "This strong performance enables the business to continue to invest in customer service and price competitiveness and full year earnings growth is expected to be in line with market expectations."

The company also said good strategic progress has been made after its North American LNG export agreement with Cheniere in March and the acquisition of Canadian natural gas assets from Suncor in partnership with Qatar Petroleum International (QPI) in April.

Downstream in the UK, its residential energy supply business had a good start to the year, with accounts numbers up by 28,000 over the first four months. "This reflects a competitive pricing position and continued good levels of customer service, leading to higher levels of customer retention," the British Gas Owner explained.

Meanwhile its North American business continues to perform well, albeit with some narrowing of margins as gas and power prices have risen.

"In Direct Energy Residential we are benefiting from the impact of the NYSEG Solutions and Energetix acquisition in 2012 with consolidation of call centres on target for completion this year. In Direct Energy Business, power volumes were 19% higher in the first four months of 2013 than for the same period in 2012, reflecting small business growth," it said.

Performance in the international upstream gas and oil business has been good in the year to date and Centrica expects total production from existing assets to be around 75mmboe in 2013, up from 67mmboe in 2012. It also expects higher achieved gas prices.

The group has started its £500m share repurchase programme and to date has purchased 18.7m shares for a total cost of £66.5m.

At the end of April net debt stood at £4.0bn.

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