Bord Gáis Energy profits up 53% as revenues rise to £781m

Bord Gáis Energy saw pretax profits rise 53 per cent, from £30 million to £46 million (€54.4 million) last year, as British parent Centrica made a return to profitability.

Gross segment revenue, which represents turnover generated from the sales of energy supply products and services, rose to £781 million from £733 million.

Operating cash flow for Bord Gáis Energy in 2016 was up 171 per cent, from £31 million to £84 million as the number of customer accounts increased 4 per cent to 692,000.

The group said a £1 million impairment of application software was recognised in the Ireland business during the reporting year.

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Centrica bought Bord Gáis Energy from the Government for €1.1 billion in 2014.

“Our Irish business, Bord Gáis Energy, delivered a strong result in 2016,” Centrica said. “Adjusted operating profit and adjusted operating cash flow were significantly higher than in 2015, with second half 2016 profit higher than second half 2015, including a strong operational performance in energy supply and generation and trading.”

Centrica, Britain’s largest energy supplier, returned to profit growth in 2016 as it benefited from volatile energy prices and colder weather, and flagged the possibility of a dividend rise after two years of shareholder payout cuts.

Customer loss

The utility, which owns household energy supplier British Gas, also managed to stem a loss of customers leaving to competitors in the second half of the year after cutting tariffs. Centrica lost 409,000 household energy customers in 2016, most of them in the early months of the year.

It reported a 4 per cent rise in 2016 adjusted operating profit to £1.52 billion, compared with analyst expectations of £1.47 billion. Adjusted operating cashflow was ahead of its own guidance of up to £2.6 billion, coming in at £2.69 million.

"Centrica enters 2017 a stronger company, with encouraging underlying momentum and positioned to deliver longer-term returns and growth," said chief executive Iain Conn.

The utility said debt levels were expected to fall to between £2.5 billion and £3 billion by the end of 2017, a range it said would allow it to raise its dividend payments.

Centrica reduced its annual payout in 2015 after its core business was hit by weak energy prices and lowered it again last year.

Additional reporting: Reuters