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British Gas profits set to re-ignite energy debate

The great energy debate is set to be reignited on Thursday, following indications that British Gas is expected to report a 26% increase in income for its household electricity and gas supply business.

It is expected that the energy firm, which is owned by Centrica, will generate £352 million in operating profits over the first half of 2012, an increase of £72 million during the same period in 2011.

Operating profits for the whole group, including energy supplies to UK businesses, North American customers along with gas exploration and protection are expected to rise by 15%, to $1.45 billion.

The business division on British Gas, who primarily supply energy to SMEs, is set to buck this trend, falling by 17% to £106 million due to difficult economic conditions reducing customer numbers and usage.

Many of the major energy suppliers have recently come under fire for raising energy prices at a time when consumers are struggling to pay their energy bills.

It is expected that British Gas will attribute the increase in domestic supply profits to the fact that the division performed poorly during the first half of 2011, which was a loss making period.

Analysts now anticipate that the colder weather in 2012 will help energy usage to rebound to a more normal level, which will explain the profit increases.

Speaking to the Daily Telegraph, an analyst at Investec said: “The winter months are usually the key ones, and January and February were unseasonably mild.

“However, April was cold and wet, and May and June also featured relatively poor weather. Taking all of this together, the total H1 2012 consumption has probably ended up at long-term average levels.”

Profits for the whole year are expected to be broadly similar to 2011, with a greater proportion coming from the first half of the year.

This was posted in Bdaily's Members' News section by Ruth Mitchell .