Centrica Profits Slashed as British Gas Earnings Take a Nosedive
Centrica PLC, the parent firm of British Gas, has hit a rough patch. Its interim profits for the first half of 2024 plunged sharply, dragged down by tumbling energy prices and the loss of a one-off payment that boosted earnings last year.
Half-Year Profits Halved Amid Energy Market Turmoil
The company’s interim adjusted operating profit nosedived to £1.04 billion for the six months ending June 30, down from a hefty £2.08 billion in the same period last year. This massive drop reflects the volatile energy market, with wholesale prices falling after last year’s record spikes sparked by Russia’s invasion of Ukraine.
British Gas Profits Plummet by Over 80%
British Gas Energy took the biggest hit, with profits slumping to just £159 million from £969 million in H1 2023. Last year’s figures were propped up by a £500 million boost after Ofgem’s energy price cap adjustments helped recover costs from the energy crisis — a windfall that didn’t come through this time.
Chris O’Shea, Centrica CEO, said: “Our core businesses continued to deliver in line with our expectations in the first half of 2024, against the backdrop of more normalised market conditions.”
Infrastructure Profits Also Slide
Centrica’s infrastructure arm, covering Spirit Energy, energy storage, and a 20% stake in Britain’s nuclear fleet, saw profits dip to €522 million from €654 million the year before, hit by falling energy prices.
Leadership Shake-Up and Shareholder Boost
In leadership news, Chair Scott Wheway is stepping down after five years. Non-executive director Kevin O’Byrne will take the reins from December 16, 2024.
Despite the tough market, Centrica is raising its interim dividend from 1.33p to 1.5p and extending its share buyback scheme by £200 million, aiming to wrap up the programme by February 2025. The moves show confidence in Centrica’s financial health and a commitment to rewarding shareholders amid industry challenges.
