27th Apr 2015 06:23
LONDON (Alliance News) - Centrica PLC on Monday said energy consumption in the first quarter of 2015 was higher as weather was colder than expected, despite the number of residential accounts remaining broadly flat and business accounts falling, but the company reiterated its full-year guidance.
The FTSE 100 company said residential gas consumption was 10% higher in the first three months of 2015 year-on-year with electricity consumption increasing by 2%, which Centrica said was due to colder temperatures than normal during the period.
Although gas consumption rose, the company said it had around the same amount of residential energy accounts as a year ago at 14.8 million. The company's British Gas Business division saw the number of accounts slightly fall to 826,000 from 854,000.
In Ireland, customer accounts also remained fairly flat at about 800,000, with energy consumption also rising due to colder weather.
Centrica said it has also installed 1.4 million residential smart meters in the UK, and have sold nearly 200,000 smart thermostats, mostly under its Hive Active Heating brand. In March, Centrica acquired AlertMe, the provider of the tehcnical platform that underpins the Hive Active Heating brand.
The Direct Energy division "remains on track to deliver material operating profit growth in 2015" compared to a "weak" performance last year. Total Direct Energy gas consumption in the first quarter was 1% higher than the same period last year, also due to the colder-than-expected weather.
A combination of more stable physical infrastructure, market re-design and management action meant Centrica did not see a repeat of the additional costs in the division that were incurred last year, it said.
"We continue to make good progress in building our brand in North America. In March it was announced that Direct Energy was joining a range of well-known brands to launch Plenti, the first United States-based coalition loyalty programme, where consumers can earn and use reward points for purchasing a wide range of products," said the company.
The Direct Energy Business is now benefiting from increased unit margins on contracts sold in prior periods, while average commercial and industrial sold unit margins again improved in the first quarter of 2015, and were higher than in the second half of 2014 for both gas and electricity.
The Direct Energy business saw a 42,000 reduction in the number of accounts in the quarter to 855,000, and said it also installed 42% more solar panels in the period following its acquisition of Astrum Solar in 2014. Astrum Solar was rebranded as Direct Energy Solar in April.
Centrica Energy, its upstream business, is on track to meet the company's target of reducing capital expenditure by about 25%, totalling GBP800 million in 2015, and a 40% reduction to around GBP650 million in 2016. Centrica has also identified a number of initiatives to reduce costs and remain on track to achieve a GBP100 million reduction in cash production costs by 2016.
"Overall production was in line with our forecasts in the first quarter, and we continue to expect full-year output of around 75 million barrels of oil equivalent in 2015. This includes production from the large-scale Valemon project, which came onstream in January," it said.
In UK power generation, the company's share of nuclear output in the first three months of the year was 3.2 terrawatt hours, up 5% compared to the same period in 2014. This reflects good operational performance, despite the Heysham 1 and Hartlepool power stations only running at 75-80% power.
By Joshua Warner; [email protected]; @JoshAlliance
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