By Nicholas Earl
Centrica has restored its dividend, with the energy giant enjoying a post-pandemic rebound, powered by soaring oil and gas prices.
The British Gas owner has posted profits of £1.34bn for its first six months of trading this year.
This is a vast increase on earnings of £262m this time 12 months ago.
The giant has also offered up basic earnings per share of 11p, with cash flow from operations climbing to £643m, with net cash of £316m compared to net debt of £93m in last year’s half-year report.
The strong headline results have restored the company’s confidence in the business – to the point that Centrica has now reinstated its dividend, with a 2022 interim dividend of 1p.
This equates to £59m.
Alongside roaring commodity markets, Centrica has finalised the sale of Spirit Energy Norway and the Statfjord field in May, resulting in a £800m reduction in gross decommissioning liabilities.
Meanwhile, British Gas Energy’s operating profits decreased 43 per cent to £98m from £172m this time last year.
One of the key factors for the drop-off in earnings was Centrica purchasing additional supplies, as a higher number of customers movedonto the default tariff than the company had purchased gas and power for.
With Ofgem allowances for this unexpected cost only kicking in from April, this was a negative factor in its first half financial results.
Overall residential energy customers grew three per cent 7.46m, with profit per customer climbing to £6 after tax.
Chris O’Shea, Centrica’s group chief executive, said: “The past year has demonstrated the importance of well-funded, well-run energy companies. We’ve made significant progress de-risking the group and building a stronger business for the benefit of all stakeholders.
This strength has allowed us to lead the industry in measures to protect and support customers through the most challenging energy crisis in living memory and the benefit of our balanced portfolio can be seen in our first half performance. We expect this to continue into the second half, underpinning continued investment in customer service and elsewhere in our portfolio.”
Centrica’s strong half-year results comes amid mass carnage in the energy sector, with 29 suppliers collapsing in the past year alone, directly affecting over four million customers.
However, the energy giant has managed to navigate the choppy market waters courtesy of a commodities boom.
Russia’s invasion of Ukraine alongside booming post-pandemic demand for energy has seen oil prices peak this year at a 14-year high of $139 per barrel in March.
Prices remain historically elevated, and have traded above or close to the $100 milestone for five months after operating below three figures for eight years.
Meanwhile, gas prices climbed to record highs on European benchmarks yesterday, following further heavy reductions in gas flows on the Nord Stream 1 pipeline into Germany.
Households are now braced for another vast hike in the price cap – with forecasters predicting it could reach £3,500 per year in October and £3,850 per year in January.
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