Centrica, the owner of British Gas, has seen half-year profits rise five-fold to £1.3 billion as rising energy prices hit households.
The company also revealed that it will start paying dividends to shareholders for the first time after 2020 – as its oil and gas arm delivers massive profits.
While British Gas struggled to cope with high energy prices, Centrica benefited from its investments elsewhere.
The energy giant said its upstream business, which includes its North Sea operations, posted adjusted operating profit of £906 million in the first six months of the year – an increase of more than 1,100%.
And the business has returned its dividend to investors by paying 1p per share, which will give a Centrica shareholder around £100.
Asked if he would use some of the cash to help customers who have been hit with bills of more than £3,800 since January, chief executive Chris O’Shea said British Gas was running wisely. They are saving consumers more money.
Without pre-purchasing its energy, Centrica would have lost around £4.4 billion, he added.
“I know when people are going through tough times it’s hard to see the word profit, or profit, or words like that. I’m very conscious of that,” Mr O’Shea said.
“Bear in mind, over the next two years we’re expecting to pay a windfall tax of potentially over £600 million on our UK gas business that we’re looking at, so there’s a lot of that going on. . Back to society.”
Profit growth comes from the company’s nuclear and oil and gas businesses, not British Gas.
The supply business fared poorly – its profits came in at just £98m, down 43% on the same period a year earlier, before the energy crisis took its toll. had taken
More than 200,000 customers joined British Gas as some of its competitors went out of business during the period.
The business gained 158,000 new accounts when it took over the sale of gas and electricity to Together Energy customers.
Together was one of about 30 suppliers that collapsed last year.
Regulator Ofgem assigned its customers to British Gas.
But the business said it also managed to attract 46,000 customers during that period, who voluntarily switched to its services.
This came despite being the cheapest deal on the market, despite the price range, giving consumers little reason to switch.
British Gas reported an adjusted operating profit of £98 million, down 43 per cent on the same period a year earlier, before the energy crisis took a bite out of its fair share.
It’s been a busy year for energy providers like British Gas.
Gas prices began rising last summer and haven’t slowed since, hitting record highs several times.
This has put pressure on suppliers, especially since almost all of them are prohibited from passing costs on to customers immediately.
The energy price cap, which limits what suppliers can charge households, takes into account the price of gas on international markets.
But because the price cap was changed only once every six months, there was a lag between the price of gas that suppliers paid and what they could charge their customers.
Partly as a result, many energy providers that served the market a year ago are now out of business.
In response to the crisis, Ofgem will now update the price cap – which puts an upper limit on a supplier’s default tariff – every three months.
“Rising wholesale commodity prices meant that default tariffs remained cheaper than almost all new fixed-price rates,” Centrica said.
“This resulted in more customers coming in on default tariffs that we had hedged, requiring us to buy more commodities from the market at prices higher than the price ceiling.
“Price cap allowances have been introduced to offset these costs, however the recovery will be mostly in future periods.”
On a call with reporters, Mr. O’Shea revealed that the company has already begun engineering work on a rough gas storage site in the North Sea.
Talks are underway with the government to potentially open the site, which could store up to 10 liquefied natural gas tankers by this winter, if all goes as planned. After that, it may expand further next year.