Centrica profits fall in half-year results, Spirit Energy up

Centrica (LON:CNA) profits fell substantially in its half-year results in what the British Gas owner says is a return to a “more normalised environment”.

Centrica recorded £1.035 billion in adjusted operating profit (AOP) in the six months to 30 June this year, down from £2.083 billion in the same period in 2023.

The fall in profit largely came from a substantial drop in profit in the company’s retail division, with AOP from its British Gas division falling from £969 million in 2023 to £159 million this year.

Meanwhile, the firm’s North Sea producer Spirit Energy recorded a stronger performance, with AOP more than doubling from £108 million to £245 million.

Centrica said it continues to make progress on carbon storage opportunities in Morecambe Bay through Spirit.

The company also “remain ready” to transform its Rough field in the North Sea, which could potentially store up to 200 billion cubic feet of hydrogen.

However, Centrica said the future outlook for Rough is “challenging given low seasonal spreads”.

© Centrica Storage

Centrica group chief executive Chris O’Shea said the firm’s core businesses “continued to deliver in line with our expectations” in the first half of 2024 against a backdrop of more normalised market conditions.

“Against the medium-term profit objectives we set out last year, we are on track to deliver two years ahead of schedule for the majority of our businesses, and we continue to ramp up our investment programme, including in innovative technologies that will support the UK and Ireland’s net zero ambitions,” O’Shea said.

“Alongside this, the investments we are making in our data capabilities, product innovation and customer service have helped to improve operational performance across the Group.

“This has driven marked improvements in customer satisfaction, allowing us to continue shifting our focus to growing customer numbers, and helping to deliver for our colleagues, customers and investors over the long-term.”

Centrica said group profitability will be “heavily weighted” to the first half of 2024, with group net cash expected to decline over the rest of the year.

Energy transition

Centrica said it continues to create value through investment in energy transition opportunities, including through a strategic partnership with Highview Power.

Highview is developing the first liquid air energy storage plant in the UK, with Centrica provided a phased investment of around £70 million.

Alongside its carbon capture and hydrogen storage investments, Centrica said it is also exploring offshore wind opportunities in Ireland with Corio Generation.

Meanwhile, in its more traditional oil and gas operations Spirit Energy saw an 18% drop in gas production volumes.

Spirit recorded 6.9 million barrels of oil equivalent in the first half of 2024, including 38.4 billion cubic feet of gas.