UK Energy Group Centrica’s Surging Profit Sparks Fury

The energy sector has reaped huge profits and revenues after Russia’s invasion of Ukraine forced energy prices higher SHAUN CURRY

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Britain’s biggest domestic energy supplier Centrica on Thursday posted rocketing annual profit, sparking fury as Britons face soaring household electricity and gas bills that have fuelled a cost-of-living crisis.

The energy sector has reaped gigantic profits and revenues, after gas and crude oil prices spiked higher in the wake of key producer Russia’s invasion of Ukraine one year ago.

Operating profits more than tripled to £3.3 billion ($4.0 billion) in 2022 compared with £948 million year earlier, British Gas owner Centrica said in a results statement. Revenues were up 60 percent at £23.7 billion.

“Our performance in 2022 demonstrates the benefits of our balanced portfolio and our strong balance sheet,” said chief executive Chris O’Shea.

“The energy crisis and cost-of-living pressures have created a challenging environment for customers and communities, but we have been able to provide much-needed stability and support.”

Britain’s Conservative government of Prime Minister Rishi Sunak is temporarily subsidising electricity and gas bills this winter.

Homes and businesses are nevertheless left paying far more than a year ago, while the state cap on average annual household fuel bills will rise by a fifth, to £3,000, in April.

Centrica said Thursday it had spent £75 million in support measures for customers last year. Most of its annual profit came from its nuclear power plants and energy trading divisions, it said.

Trade unions and members of the opposition Labour party have repeatedly called for Sunak to ramp up his windfall tax on the sector to fund more assistance.

Centrica sparked more anger Thursday by expanding its stock buyback scheme to hand another £300 million to shareholders.

“While millions of families struggle to heat their homes, firms like Centrica are raking in monster profits,” said Trades Union Congress boss Paul Nowak.

“Privatisation has been a disaster for hard-pressed households. The only real winners have been shareholders who have creamed off hundreds of millions in dividends.”

Ed Miliband, Labour climate spokesman, argued the sector was raking “in the windfalls of war” and pledged a levy on such profits.

“Labour would use a real windfall tax to stop the energy price cap going up in April,” he said.

Centrica also logged an annual net loss of £782 million, skewed by a vast £2.4-billion loss on “certain re-measurements” after revaluing its hedging positions on energy supplies.

That contrasted with profit after taxation of £1.2 billion in the previous year.

The group faced criticism earlier this month after an investigation by The Times newspaper found that contractors working for British Gas sent debt collectors to “break into” homes and “force-fit” energy meters.

The revelations sparked a probe by UK regulator Ofgem and saw most energy companies, including Centrica, suspend the practice.