Energy giant Centrica said yesterday mild weather led to a 30% fall in operating profits at its residential arm, Scottish Gas and British Gas, to £522million during 2011.
The UK’s biggest gas supplier, which lost 97,000 customers last year, said an unseasonably warm spring and autumn led to a 21% drop in average household gas consumption and a 4% fall in electricity.
Centrica raised gas and electricity bills by an average 18% and 16% respectively in August but softened the blow to consumers with a 5% cut in electricity prices in January.
The group reported a 1% rise in adjusted operating profits to £2.41billion after earnings at its upstream gas and oil exploration business jumped 33% to £1billion. Pre-tax profits from continuing operations last year came in at £1.37billion, down from £2.8billion in 2010, on revenue up lightly at £22.8billion.
The upstream business smashed through the £1billion barrier for the first time after benefiting from higher wholesale commodity prices and a good production performance.
Chief executive Sam Laidlaw said it had been a tough year for Centrica and its customers but the company was still making the investments “on which Britain’s energy future depends”. He added that average domestic customer bills were about 4% lower in 2011 than the year before despite higher unit prices.
Mr Laidlaw said: “The squeeze on household disposable income has also put pressure on our residential services business, with customers deferring discretionary spending, especially on new central-heating systems.
He said Centrica aimed to deliver £500million of cost savings over two years, which would allow it to continue to invest for further growth, adding: “The programme to identify efficiencies is already well under way and we expect to realise around half of these savings in 2012.
“As part of these measures, we have taken out 2,300 roles across the business and implemented a pay freeze across much of the group, including the board, however, we remain committed to investing in the skills and the people we need to achieve our growth ambitions.”
Centrica employs nearly 35,000 people, including about 350 in Aberdeen in its oil and gas business.