British Gas owner Centrica says profits to beat forecasts

17th November 2010, Comments 0 comments

Energy provider Centrica, which owns British Gas, forecast on Wednesday that profits are on course to beat market expectations this year, just one week after lifting its prices.

"Centrica continued to perform strongly during the third quarter, making good progress towards the strategic priorities set out earlier this year," the group said in a trading update.

"Overall, the group's forecast operating profit for 2010 is slightly ahead of current market expectations."

Wednesday's statement was published once week after British Gas hiked its domestic gas and electricity tariffs by around seven percent, and blamed the rising cost of wholesale energy.

British households are facing a new round of price hikes during the winter months, after energy sector regulator Ofgem warned in September over soaring wholesale energy costs.

"Forward wholesale gas and power prices are significantly higher for 2011 than they have been in the current year," added Centrica.

"Other costs, such as network charges and environmental obligations, are also rising.

"This has necessitated Centrica's increase in residential gas and electricity prices of seven percent, which was announced on November 12 and will take effect from December 10."

Centrica's net profits had rocketed by almost sevenfold to nearly 1.4 billion pounds in the first half of 2010, as Britain's coldest winter in decades caused a spike in gas demand.

© 2010 AFP

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