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 20 July 2008 18:20 BST

Profits down at British Gas

Monday, 12 May 2008 09:27
British Gas profits have fallen
British Gas owner Centrica has warned that first half profit will be significantly lower than last year as high and hinted more price hikes may be on the way.

Despite raising prices for domestic customers, the high price of gas, which has doubled in the last year, has kept profits down.

Centrica also suggested more price rises could be on the cards for British Gas customers, saying in its statement: "While the current outlook for gas prices does create a challenging environment for energy suppliers, we will take the necessary action to deliver reasonable margins in the retail business."

Sales of energy accounts slowed following the price rise, which meant that British Gas ended April with 15.9 million customer accounts on supply.

High wholesale gas costs have impacted the legacy industrial and commercial gas sales contracts, Centrica added.

"Losses here are currently expected to be materially higher than previous guidance," the gas and electricity supplier said.

Record oil prices, rising demand in Asia for the available Liquified Natural Gas and a lack of imports from continental Europe are driving the high prices, Centrica said.

Performance across the remainder of the group has been good, Centrica added.

High energy prices are a major contributor to inflation, the Bank of England said in its last inflation report.End of story


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