Centrica profit triples to record high on soaring energy prices

A British Gas sign is seen outside its offices in Staines in southern England
A British Gas sign is seen outside its offices in Staines in southern England, July 31, 2014. REUTERS/Toby Melville/File Photo

Feb 16 (Reuters) - Centrica's (CNA.L) profits tripled to a record 3.3 billion pounds last year on soaring energy prices and production, paving the way for a 300 million pound share buy-back, sending the company's shares to their highest level in almost four years.

The bumper results come as millions of households in Britain are struggling to pay energy bills and with the company under scrutiny after The Times newspaper reported that debt agents working for Centrica's British Gas business had forcibly installed prepayment meters in some vulnerable customers' homes.

The results also come after British energy groups BP and Shell reported record profits for 2022 of $28 billion and $40 billion respectively.

Chief Executive Chris O'Shea said on a call with reporters on Thursday the revelations made by the newspaper were deeply concerning and that it has halted forced prepay metre instalments and is carrying out an investigation.

O'Shea said cost-of-living pressures had created a challenging environment for customers and defended the company's record profits, saying it spent 75 million pounds ($90.44 million) on support schemes for retail and business customers last year.

“It's important companies that contribute to our country are sustainable... you have to make a profit," he said.

The British government is currently subsidising gas and electricity costs for most households but even with this support costs are still around three times higher than before the pandemic and before Russia's invasion of Ukraine.

O'Shea said profits at the British Gas fell, with British Gas Energy adjusted operating profit down 39% at 72 million pounds.

Centrica's earnings were boosted by soaring profit in its upstream oil and gas division, with wholesale gas prices hitting record highs last year as Russian gas supplies to Europe shrank following Moscow's invasion of Ukraine.

The company also owns a 20% stake in Britain's nuclear power stations, which increased generation last year and benefited from higher electricity prices.

Centrica restored its dividend at its interim results last year for the first time since 2019. On Thursday it proposed a final dividend of 2 pence, taking the full-year dividend to 3 pence.

The extension of the company's share buy-back programme, on top of the 250 million pound buybacks already announced, would result in it buying back 10% of its capital, the group said.

Centrica last year partially reopened its Rough gas storage site which had closed in 2017 to help ensure gas supplies over the winter.

O'Shea said he expected the facility to be available at the same 30 billion cubic metre capacity for the winter of 23/24.

Centrica's total adjusted operating profit for 2022 rose to 3.3 billion pounds from 948 million pounds in the previous year.

Shares in the company were up more than 5% on Thursday morning, their highest level since May 2019.

($1 = 0.8293 pounds)

Reporting by Susanna Twidale in London and Muhammed Husain in Bengaluru; Editing by Sherry Jacob-Phillips, Christopher Cushing and Jane Merriman

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