Bord Gáis Energy profits fall to €50m despite positive revenues
SHARES in UK energy giant Centrica, which owns Bord Gáis Energy, sank as much as 12pc yesterday as it warned that a cap on UK energy prices will hit its cash flow.
The sharp decline brought the company's shares to a 16-year low.
The group also said that profits at Bord Gáis Energy fell 6pc to £44m (€50.7m) as it was impacted by an extended and planned maintenance outage of its power station in Whitegate. However, it said that its Irish unit had performed well overall in 2018. Its reported revenue in Ireland rose 9.3pc to £841m (€968.7m).
Bord Gáis Energy had 691,000 customer accounts at the end of 2018, up 2pc from 679,000 at the end of 2017.
The power station outage in 2018 was its first since it was commissioned in 2010.
Along with other energy providers in Ireland, Bord Gáis Energy raised its prices last year, increasing its gas prices by 4.7pc in August, and its electricity prices by 5.8pc.
Earlier this month it announced another price rise. It will hike its average gas bills by 2.3pc, and average electricity bills by 4.3pc from March.
Bord Gáis Energy MD Catherine O'Kelly insisted that the group had been "working hard" to hold off raising prices for as long as possible. "However, increases in wholesale energy costs have forced us to raise our prices," she said.
In January, the Bord Gáis Energy Index showed that in December oil prices dropped 9pc month-on-month, while gas prices fell 2pc. However, in January, oil prices jumped 15pc over December, but gas prices tumbled 6pc.
Centrica warned that a fall in nuclear power output and lower volumes at its oil and gas division will also hit 2019 results. Centrica said a regulator-imposed cap on standard UK energy prices would lead to a £300m (€345.5m) hit to profits in 2019, including a one-off impact of about £70m (€80.6m) in the first quarter.
Late last year Centrica, whose British Gas unit is Britain's largest energy supplier, said it would seek a judicial review of the way UK energy regulator Ofgem calculated part of the price cap, which was initially set around 6pc lower than British Gas's standard variable tariff.
Ofgem this month said the cap will be raised by 10pc from April 1 and British Gas has already said it will increase its prices by the same amount.
"We believe [the cap] is the wrong intervention but it is here and we will live with it," said Centrica CEO Iain Conn.
British Gas shed 742,000 customer accounts in 2018 as the company came under pressure from nimbler rivals.