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Britain's Centrica posts steady profit as seeks reinvention

Centrica's profits steady as restructuring continues
Centrica's profits steady as restructuring continues   -   Copyright  Thomson Reuters 2021
By Reuters

By Susanna Twidale

LONDON -British energy supplier Centrica reported broadly flat operating profits on Thursday for the first six months of 2021, after the impact of COVID-19 and industrial action offset a boost from stronger energy demand.

The British Gas owner has sought to reinvent itself as an energy service provider, selling upstream assets, and said it will set out its strategy at a capital markets event on Nov. 16.

Adjusted operating profit from continuing operations, excluding its North American business Direct Energy that it sold in January, was broadly flat at 262 million pounds ($359.67 million), compared with 264 million pounds in the first half of 2020.

Colder than normal weather boosted British Gas profits by 94 million pounds as customers used more energy.

But bad debts and disruption linked to COVID‐19 and industrial action cost the group 80 million pounds, 58 million more than in the first half of 2020, the company said.

A protracted dispute over pay and conditions, which led around 7,000 workers to strike earlier this year, is over, the company said.

The industrial action affected customer satisfaction, Centrica CEO Chris O’Shea told journalists on a call.

British Gas Energy residential customers fell by 114,000 or 2% over the first half.

The company, which paused dividends last year, said it would not propose an interim dividend and would resume dividends “when it is prudent to do so”.

Centrica said it may also consider retaining its 20% stake in Britain’s operating nuclear power fleet, as “an important source of zero carbon electricity”. In 2018 it had said it would sell it.

Centrica still plans to sell its 69% stake in oil and gas firm Spirit Energy, possibly in parts rather than as a whole O’Shea said.

Some British business, such as supermarkets and road hauliers, have said they face staff shortages as rising COVID-19 infections cause hundreds and thousands of people to be told to isolate.

O’Shea said the company has not seen a material impact so far.

($1 = 0.7284 pounds)