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    Centrica profits jump despite customer exodus

Summary

Elsewhere, the UK company said it continues restructuring with the pursuit of the sale of its upstream arm Spirit Energy.

by: Daniel Graeber

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Centrica profits jump despite customer exodus

UK energy supplier Centrica said July 22 that operating profits soared over the first six months of the year, though the pandemic dented its gas customer base.

The British Gas owner reported that customers fell by 4% over the first half of the year, due in part to the economic impact of COVID-19. Its revenue per services customer was flat, at £359 ($490).

Colder weather at the start of the year, however, helped push energy profits for British Gas up 121% to £172mn. Total free cash flow for Centrica from continuing operations was up 4% to £524mn, while net debt fell from £3bn to £93mn. Ebitda of £682mn marked a 9% improvement year-on-year.

Elsewhere, the company said it was continuing with its efforts to shed its upstream oil and gas business by selling off its 69% interest in Spirit Energy. That sale, however, was also impacted by the “uncertain backdrop created” by the COVID-19 pandemic, so it is looking at alternative sale options.

“While we still own Spirit Energy, we will actively manage it,” Centrica stated.

Citing natural declines, Centrica said that upstream production volumes from Spirit declined 28% to 17.1mn barrels of oil equivalent. Full-year production is expected to be as much as 20% lower than the full-year 2020 volume of 44.9mn boe.

As part of its restricting efforts, the company in June agreed to sell its 245-MW Peterborough open-cycle gas turbine and the 49-MW reciprocating gas engine on the same site in the east of England to Whitetower Holdings, an affiliate of Rockland Capital. The £20mn price is subject to customary working capital and other completion adjustments.

The sale is "consistent with Centrica’s strategy to become a simpler, leaner group focused on delivering for its customers and its target to be net zero by 2045," the company said at the time.

The effort, however, led to the elimination of 3,000 jobs last year, with another 1,000 roles expected to be cut yet this year.