Centrica 1H Profits Fall 35% On Weather Woes

Reuters

LONDON, July 31 (Reuters) – British utility Centrica posted a 35 percent fall in operating profit for the first half of the year as a mild winter in its home market led to reduced energy demand and extreme weather in North America increased costs.

Centrica made 1.032 billion pounds ($1.75 billion) in operating profit, down from 1.583 billion a year earlier, it said on Thursday.

The company was hit by 65 million pounds of costs relating to the polar vortex cold snap that hit North America earlier this year. It also posted write-offs of 40 million pounds relating to the cancelled Celtic Array windfarm project.

"The first half of the year has seen challenging market conditions across the group, both as a result of the weather and reflecting the wider political environment," Centrica chairman Rick Haythornwaite said in a statement.

Revenues increased by 15 percent to 15.7 billion pounds, which the company attributed mainly to a more than doubling in turnover at its North American Direct Energy subsidiary, boosted by the near $1 billion acquisition of Hess Corp's energy marketing business.

Basic first-half earnings per share (EPS) fell 29 percent to 10.5 pence and the company said it expected full-year EPS to be in the 21-22 pence range.

Operating profits at Centrica's British Gas arm fell 20 percent to 455 million pounds in the first half as a mild winter led to lower-than-usual energy consumption.


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