16th Feb 2023 08:33
(Alliance News) - Centrica PLC on Thursday reported it swung to a statutory loss in 2022 on re-measurement and higher operating costs, but adjusted profit tripled as revenue surged 84%.
The Windsor, England-based owner of British Gas revealed a pretax loss of GBP240 million in 2022, compared to a profit of GBP954 million in 2021. Revenue jumped 84% to GBP33.64 billion from GBP18.30 billion.
The swing to a loss was on re-measurements after taxation, Centrica said, largely reflecting the revaluation of UK energy supply hedging positions due to wholesale gas and power price falls towards the end of the year. The cost for re-measurement and settlement of derivative energy contracts ballooned to GBP8.48 billion in 2022 from GBP434 million in 2021.
Further, operating costs increased fourfold in 2022 to GBP2.38 billion from GBP572 million.
However, adjusted operating profit tripled to GBP3.31 billion from GBP948 million on the revenue rise.
"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," Centrica said.
"We invested GBP75 million in supporting our energy customers in 2022, which was greater than the GBP8 post-tax profit per customer earned by British Gas Energy. Whilst customers may see some relief given recent easing of prices, it remains clear that some will continue to need help and we will do what we can to support them in the year ahead."
Earlier this month, British Gas came under pressure for its treatment of "vulnerable" customers who faced debt collectors forcibly installing prepayment meters in their homes.
UK Energy Minister Graham Stuart asked Centrica to urgently outline "redress" for "mistreated customers", while regulator Ofgem called for "action, not warm words".
Ofgem ordered all domestic energy companies to suspend the system of forcibly installing prepayment meters, while Business Secretary Grant Shapps described the practice as "outrageous". Since February 3, British Gas is banned from force-fitting prepayment meters.
Adjusted earnings before interest, tax, depreciation and amortisation, meanwhile, jumped to GBP3.99 billion from GBP1.85 billion in 2021.
Centrica met the guidance it gave in January. Adjusted earnings per share in 2022 jumped to 34.9 pence from 4.1p a year ago, as it had predicted more than sevenfold growth to over 30p.
Net cash held fell to GBP1.31 billion from GBP1.61 billion. The company estimated net cash over GBP1 billion, without giving a range.
Centrica added it intends to extend its existing GBP250 million buyback programme, announced in November, by an additional GBP300 million. This would result in Centrica buying back 10% of its share capital, the power utility said.
The company proposed a full-year dividend of 2.0 pence, compared to none in 2021.
Looking ahead, Centrica said for its Optimisation unit, it does not plan for 2022 conditions to repeat in 2023. For Upstream Infrastructure, it said wholesale prices, while down from a 2022 high, were at historically high levels. "With hedges rolling off, we would expect to see higher captured prices in our gas production and nuclear activities, albeit earnings will be significantly impacted year on year by the implementation of additional upstream levies," it said.
Centrica shares were 4.4% higher at 102.85 pence each in London on Thursday morning.
By Tom Budszus, Alliance News reporter
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