Mild weather hits Centrica profits

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Energy giant Centrica today said mild spring and autumn weather had fuelled a 30 per cent slide in profits at its residential arm British Gas to £522m last year.

The UK’s biggest gas supplier, which lost 97,000 customers in 2011, said the unseasonably warm weather in spring and autumn led to a 21 per cent drop in average household gas consumption and a four per cent fall in electricity.

The slide in profits for the year to December 31 comes despite the energy supplier hiking gas and electricity bills by an average of 18 per cent and 16 per cent respectively in August. It has since announced a five per cent cut in electricity prices in January.

Centrica, however, reported a one per cent increase in adjusted operating profits to £2.41bn as its upstream gas and oil exploration business saw profits jump 33 per cent to £1bn.

Some of the fall in profits in supplying gas and electricity to households has been clawed back through residential services such as boiler repairs, where profits were 10 per cent higher at £264m.

The upstream business smashed through the £1bn barrier for the first time, recording a 33 per cent increase in profits to £1.02bn, after benefiting from higher wholesale commodity prices and a good production performance.

The company claims it has invested £1.80 for every £1 it has earned over the past five years. Its dividend for shareholders increased eight per cent to 15.4p a share.

Chief executive Sam Laidlaw said it had been a tough year, “both for Centrica and our customers”, but that the company was still making the investments “on which Britain’s energy future depends”.