Britain’s Centrica restores dividend as profits soar

By Susanna Twidale

LONDON (Reuters) -Britain's largest energy supplier Centrica on Thursday reported a huge increase in first-half profit, boosted by asset sales and soaring energy prices, enabling it to restore its dividend.

The British Gas owner paused dividends in 2020 and began major cost cutting, selling upstream assets and seeking to reinvent itself as an energy service provider.

“We’ve made significant progress de-risking the Group and building a stronger business for the benefit of all stakeholders,” CEO Chris O’Shea said in a statement.

The rise in profits comes as wholesale gas prices have hit record highs across Europe this year, following Russia's Feb. 24 invasion of Ukraine, in turn pushing up energy prices for consumers.

A British price cap on the most widely used domestic energy contracts is expected to rise by at least 64% in October, having already increased 54% in April, contributing to rising inflation and a cost of living squeeze.

Centrica's adjusted operating profit for the first six months of 2022 rose to 1.34 billion pounds, up from 262 million a year earlier.

The company said it would reinstate a progressive dividend, initially offering offer an interim payout of 1 pence per share.

Operating profits at British Gas fell 43% to 98 million pounds during the period as it needed to buy more energy in the wholesale market than expected to cover customer demand.

It said it made 6 pounds per customer profit after tax in the first half of the year.

Centrica in May completed the sale of its 69% stake in Spirit Energy’s Norwegian oil and gas assets to Norwegian private equity firm Sval Energi for around 560 million pounds.

(Reporting by Susanna Twidale Editing by Jason Neely and Mark Potter)