Direct Energy Profit Up 5% in 2012 as New President and CEO Appointed

Wed Feb 27, 2013 2:16am EST

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Strong organic and acquisitive customer growth and continued operational
efficiencies drive positive results

HOUSTON,  Feb. 27, 2013  /PRNewswire/ -- Direct Energy,  North America's largest
competitive energy and energy-related services company, today announced an
operating profit of  US$526 million  (C$526 million, £331 million) for the full
year 2012. Direct Energy is the North American subsidiary of  Centrica plc 
(LSE: CNA). Centrica reported full year 2012 revenues of  US$38.059 billion 
(C$38.050 billion, £23.9 billion) with an operating profit of  US$4.36 billion 
(C$4.359 billion, £2.7 billion).


For the full year 2012, Direct Energy reported a 5% increase in profit from 
US$500 million  (C$493.7 million, £312 million) reported for the full year 2011,
driven by operational efficiencies across business segments, including the move
of the company's North American headquarters to Houston.   

Solid growth in residential and small business customers segments due in part to
the successful integrations of recently completed acquisitions in the U.S.
Northeast including Vectren Source and  New York-based energy retailers
Energetix and NYSEG Solutions, helped offset the planned, gradual exit of the 
Ontario  business and an increasingly competitive commercial industrial segment.
Direct Energy's year-over-year revenue decreased 3% from  US$9.841 billion 
(C$9.697 billion, £6.1 billion) in 2011 to  $9.561 billion  (C$9.558 billion,
£6.0 billion) in 2012.

Chris Weston, President and CEO of Direct Energy, said: "We saw solid customer
gains in the U.S. Northeast region and home energy services segment throughout
2012. Although weakened economic conditions, the operating environment in 
Ontario  and low wholesale prices posed challenges to parts of the business, we
were able to achieve organic and acquisitive growth in many of our downstream
and upstream segments, and successfully implement operational efficiencies
across the business. We are well positioned to continue to build our company to
create scale, stability and value for our customers across  North America."  

Direct Energy also announced today that  Chris Weston  has been appointed
Managing Director of Centrica's international downstream business with authority
over British Gas and all of Direct Energy except its upstream gas assets. Mr.
Weston will relocate from  Houston  to the  United Kingdom  for his new

Accordingly, current Direct Energy Upstream and Trading President,  Badar Khan,
will succeed Mr. Weston as President and CEO of Direct Energy effective  April
1. Mr. Khan joined Direct Energy in 2003 and has served in several roles at
Centrica and Direct Energy including Managing Director of British Gas Business.
He is a veteran of the North American retail energy markets having been involved
since 1999.  His earlier career was spent in management consulting with Deloitte
Consulting and KPMG in the US and the UK. He holds an engineering degree from
the UK, and an MBA from the Wharton School.  Mr. Khan will report to Mr. Weston.

"Direct Energy has enjoyed significant success over the last three and a half
years as we have grown our lines of business  and increased the company's
revenue and operating profit," said Weston. "I look forward to working with 
Badar Khan  as he takes on the role of running Direct Energy and increases our
presence among customers and within the industry in the future."

Full year 2012 highlights from Direct Energy's lines of business include:   

Direct Energy Residential

* Operating profit for the business was broadly flat at  US$249 million  (C$249
* U.S. customer numbers increased to 3.5 million following organic growth and
the successful integrations of Gateway Energy and Vectren Source in addition to
the acquisition of an additional 245,000 residential and small business
customers from  New York-based energy retailers Energetix and NYSEG Solutions.  
* Continued expansion of residential customer base in  Texas  from the
successful integration of First Choice Power and sustained success of "Power to
Go" pre-paid product offering.

Direct Energy Business

* Operating profit for the business increased 16% to  US$205 million  (C$205
million) from  US$176.5 million  (C$173.9 million) in 2011.  
* The business enjoyed record sales in 2012 reinforcing continued organic growth
* Operating margin increased to 4.8% reflecting the positive impact of
operational efficiencies achieved in competitive market conditions.  
* Sales channel optimization and headroom in key markets are driving the small
business sector. The commercial and industrial segment is increasingly
competitive, however we are holding market share through competitive price

Direct Energy Services

* Operating profit increased 14% to  US$51 million  (C$51 million) from  US$44.8
million  (C44.1 million) in 2011 following full integration of Home Warranty of
America (HWA), which provides a platform for further opportunities for the
cross-selling of energy and services.  
* Contract relationships increased 5%, reflecting success of the HWA
* Sustained market share growth despite challenging economic environment.

Direct Energy Upstream

* Operating profit for the business was  US$21 million  (C$20 million)  
* Successful integration of the producing natural gas weighted assets in the
Carrot Creek region of  Alberta  acquired from Encana Corporation in  December
* In  Texas, power generation volumes increased by 21% largely due to good asset

Notes:  The results reported in British pounds are expressed in U.S. and
Canadian dollars (based on monthly average FX rates) except where noted. For
reference average full year rates are: For 2012: £1 =  US$1.5896; 2011: £1 = 
US$1.6103: 2012: £1 =  C$1.5892; 2011: £1 =  C$1.5855.   

About Direct Energy

Direct Energy is one of  North America's largest energy and energy-related
services providers with over six million residential and commercial customer
relationships. Direct Energy provides customers with choice and support in
managing their energy costs through a portfolio of innovative products and
services. A subsidiary of Centrica plc (LSE: CNA), one of the world's leading
integrated energy companies, Direct Energy operates in 46 U.S. states plus the 
District of Columbia  and 10 provinces in  Canada. To learn more about Direct
Energy, please visit  

SOURCE  Direct Energy

Micah Hirschfield, Direct Energy, micah.hirschfield@directenergy,com, +1 713 877
3805; or Will Briganti, RLM Finsbury,, +1 646 805

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