Sunday 18 March 2018

Bord Gáis unit beats forecasts as it delivers €38m profit

Centrica bought Bord Gáis Energy from the Government in 2014. Photo: Getty Images
Centrica bought Bord Gáis Energy from the Government in 2014. Photo: Getty Images
John Mulligan

John Mulligan

British energy giant Centrica said its €1.1bn acquisition of Bord Gáis Energy has so far worked out better than it anticipated, after the Irish unit posted profits of £30m (€38.5m) last year.

Centrica bought Bord Gáis Energy from the Government in 2014.

The utility group, whose activities also span exploration, trading and production, said yesterday that Bord Gáis Energy generated revenue of £733m (€947m) last year.

The bulk of the Irish division's profits - £23m - were generated in the first half of 2015, during the peak demand period that includes the coldest times of the year. The weaker performance in the second half of 2015 also reflects unseasonably warm weather.

Bord Gáis Energy revenue in the second half of 2015 was £333m. The Irish company, which is headed by Dave Kirwan, also introduced two price cuts last year, cutting its electricity prices by a total of 4.5pc, and gas by 6pc.

"Reflecting this, the business returned to residential energy account growth in both gas and electricity, the first time this has grown since 2011," according to Centrica, which released full-year group results yesterday. "The number of multi-product customers increased by 30pc during 2015. In addition, the number of business energy service supply points also increased by 16pc to 36,000 in the year."

The latest data published by the Commission for Energy Regulation shows that Bord Gáis Energy accelerated customer acquisition for gas supply during the second half of 2015, and slowed its customer losses at the expense of rivals such as SSE-owned Airtricity. The pace of electricity customer acquisition at Bord Gáis Energy also increased during the period, while losses in that segment slowed.

Centrica said the 445 megawatt Whitegate gas-fired power station in Cork also performed ahead of expectations.

Bord Gáis Energy is one of the smallest divisions in Centrica, which last year posted revenues of £28bn (€37.1bn), down 5pc on 2014. Adjusted operating profit fell 12pc to £1.46bn (€1.88bn), while earnings per share slipped 4pc. That was ahead of analysts' expectations, however.

Shares in the company jumped soared over 7pc as it said it would continue to cut costs to ensure it continues paying dividends to shareholders.

Centrica said that it shouldered post-tax impairments of almost £1.5bn (€1.9bn) on its exploration and production (E&P) assets, and £485m (€626.7m) on power assets.

Chief executive Iain Conn said 2015 was a "very challenging environment" for the group, with falling commodity prices creating major headwinds for its E&P and nuclear power businesses.

"The actions we have taken since the start of 2015 on the dividend, capital expenditure and costs mean the group is robust in this much lower oil and gas price environment, and our current projections indicate we can more than balance sources and uses of cash flow out to 2018 at flat real commodity prices," he added.

Centrica is also thought to be in the running to buy Energia owner Viridian, which is being sold by Bahrain private equity group Arcapita for more than €1bn. A number of other bidders are also in the mix, with the sale now believed to have entered a stage-two process.

Irish Independent

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