Centrica (LSE: CNA.L - news) , saw a 1% rise in operating profits last year to £2.41bn, but the British Gas arm saw earnings slide 30% to £522m.
The energy giant blamed the mild spring and autumn weather for the slide in profits at British Gas for the year to 31 December.
The UK's biggest gas supplier, which lost 97,000 customers in 2011, said the unusually warm weather led to a 21% drop in average household gas consumption, and a 4% fall in electricity.
But Centrica's upstream gas and oil exploration business saw profits rise by 33% to £1bn.
The drop in profits comes despite the energy supplier hiking gas and electricity bills by an average of 18% and 16% respectively in August last year.
The firm has since announced a 5% cut in electricity prices in January.
British Gas said the cut would reduce the average bill for its 5.3 million customers by £24.
Chief executive Sam Laidlaw said: "2011 was a tough year, both for Centrica and our customers.
"But the strength of our integrated business and balance sheet means we've been able to take the lead in helping customers through these difficult times, as well as delivering growth and making the investments on which Britain's energy future depends."
Last year British Gas admitted losing 200,000 customers since it raised household energy bills in the summer and warned its profits would be hit by warm weather.
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