Friday 17 August 2018

Bord Gáis profits slump despite Beast from East

Centrica CEO Iain Conn
Centrica CEO Iain Conn
John Mulligan

John Mulligan

Profits at Bord Gáis Energy - which is owned by UK power giant Centrica - slumped 56pc to €17m in the first half of the year.

The group blamed the fall on a planned maintenance outage at the 445MW Bord Gáis Whitegate power station in Cork, and lower margins due to higher commodity prices.

The stark decline in profitability also came as consumers binged on gas use to keep houses warm during a prolonged period of cold, dubbed the Beast from the East, which saw significant snowfall at the end of February and into March.

The Centrica figures show that despite the number of Bord Gáis Energy customer accounts falling 2pc year-on-year in the first half of 2018 to 678,000, the total gas use per residential energy customer account soared 20pc in the period.

The amount of electricity used per customer account rose by a more modest 5pc.

Bord Gáis Energy revenue was 11pc higher in sterling terms at £470m (€526.7m) in the period. But its adjusted gross margin fell 17pc to £65m (€72.8m).

"The financial result was affected by an extended planned maintenance outage at the Whitegate power station, which was offline for over 100 days for its first major outage since it was commissioned in 2010," said Centrica. "The plant was back online in late May, with the outage expected to result in improvements to reliability and efficiency."

Stock market-listed Centrica said that Bord Gáis Energy had not fully passed on higher wholesale commodity prices to consumers during the first half of 2018, but that price increases will take effect from this month.

"With Whitegate now back online and performing well, and a standard tariff price increase of 4.7pc for gas and 5.8pc for electricity taking effect in August, we would expect to see improved adjusted operating profit from Ireland in H2 [second-half] 2018 compared to H1 [first-half] 2018," added Centrica.

Centrica's consumer activities are focused on the UK, Ireland and North America, where it has about 24 million customers. Its chief executive is Iain Conn.

The group's earnings before interest, tax, depreciation and amortisation rose 3pc in the first half to £1.3bn (€1.4bn).

Shares in the company fell as much as 3pc yesterday.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business