* H1 adj operating profit down 19 pct to 1.26 bln stg
* H1 revenue 11.5 bln stg, down 2 pct
* Interim dividend 4.29 pence
* Sees growth in full-year earnings
* Shares fall 2.15 percent, among top FTSE fallers
(Adds executive and analyst comments, details, updates shares)
By Adveith Nair
LONDON, July 28 British utility Centrica Plc
reported a lower first-half profit as higher natural gas
prices and a dip in power demand due to the warmer spring and
summer weather took a toll on its residential energy business.
Centrica, which owns UK's biggest household energy supplier
British Gas, said a difficult operating environment compared to
the same period last year resulted in a 54 percent drop in
residential energy profits to 270 million pounds ($441. 2
Compared to a year ago, average residential gas use fell by
18 percent and electricity consumption was 3 percent lower.
"The favourable combination of extremely cold weather and
low wholesale commodity costs experienced in 2010 was not
repeated," Centrica said in a statement on Thursday.
For the six months ended June 30, Centrica reported an
operating profit of 1.26 billion pounds on sales 2 percent lower
at 11.5 billion pounds.
Analysts were looking for a profit of 1.29 billion pounds,
on sales of 11.24 billion pounds, according to a Thomson Reuters
Shares in Centrica were down 2.15 percent at 314.26 pence,
among the top percentage losers on Britain's blue-chip FTSE
The company, however, expects earnings growth for the
full-year on the back of the recent tariff increases as well as
a continued good performance at its upstream business, where
first-half profit rose 10 percent to 531 million pounds.
Analysts expect the company to report an operating profit of
2.50 billion pounds in 2011, 14 percent higher than 2010.
"Better results from the upstream business, where we are
seeing good production and where we could benefit from higher
(commodity) prices, will offset pressures on the downstream
business where we've had to put prices up," Finance Director
Nick Luff told reporters.
Three weeks ago, Centrica unveiled plans to raise domestic
tariffs for gas by an average of 18 percent, and for electricity
by an average of 16 percent, an increase which will affect nine
million British energy users. [ID: nL6E7I80YC]
On Thursday, Centrica said it had been selling energy at a
loss since April following sharp increases in wholesale prices.
"Without the August price rise, we would have made a loss in
the second half, wiping out a large a part of the 270 million
pound first-half (residential energy) profit," the company said.
The price increase should help shore up second-half margins,
Investec analyst Angelos Anastasiou said.
Centrica became the second of Britain's big six energy
suppliers to put up prices after Iberdrola's Scottish
Power. Scottish & Southern Energy followed soon after,
and analysts expect the rest to raise tariffs as well.
($1 = 0.612 British Pounds)
(Reporting by Adveith Nair, Editing by Rosalba O'Brien and Jane