Yahoo Finance FTSE 100: British Gas owner Centrica posts profits of £3.3bn as energy bills rise
British Gas owner Centrica (CNA.L) has seen its profits soar to more than £3bn for 2022 amid rocketing energy prices that have sparked a cost of living crisis.
Operating profits of £3.3bn were recorded at the company, up from £948m in 2021, and surpassing the previous highest ever yearly profit of £2.7bn, posted in 2012.
The company’s profits for 2022 were boosted by soaring wholesale gas prices after Russia’s invasion of Ukraine. The energy company said it paid about £1bn in tax relating to its 2022 profits.
The majority of Centrica's bumper profits came from its nuclear and oil and gas business, rather than from the British Gas energy supply business, which contributed £72m out of the £3.3bn profit.
Chris O'Shea, group chief executive, said: “Our performance in 2022 demonstrates the benefits of our balanced portfolio and our strong balance sheet.
"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 it would extend its share buyback scheme, the money it returns to its shareholders, to £300m and also pay out a full-year dividend of 3p a share.
The earnings haul for last year have stoked anger over a run of massive profits notched up in the sector and reinforced calls for greater windfall taxes.
Trade union Unite hit out at “rampaging energy profiteering” and Centrica’s treatment of customers.
Unite general secretary Sharon Graham said: “British Gas owner Centrica has been coining it in from our massive energy bills while sending bailiffs to prey on vulnerable consumers the length and breadth of the country.
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“These energy companies are showing us everything that is wrong with the UK’s broken economy.
“Rishi Sunak should get a grip – pull the plug on rampaging energy profiteering, impose a meaningful, tough windfall tax and give the NHS a pay rise with the proceeds.”
Centrica’s North Sea profits are subject to a windfall tax on North Sea oil and gas operators while it also has a 20% stake in Britain’s nuclear power stations, which are subject to the electricity generator levy implemented by the chancellor, Jeremy Hunt, to capture windfall gains.
Sana Yusuf, climate campaigner at Friends of the Earth, said Centrica’s earnings will fuel “further outrage”, given the cost of living crisis.
“Another set of bumper profits from one of the companies fuelling the energy and climate crises will no doubt spark further outrage as millions of people struggle to pay their bills and face a drop in government support from April.
“The new Energy Security and Net Zero Secretary needs to step up and back growing calls for a tougher windfall tax on the excessive profits of fossil fuel companies like Centrica to help fund the investment in insulation and homegrown renewables needed to bring down bills and cut emissions.”
It cannot be right that, as oil and gas giants rake in the windfalls of war, Rishi Sunak's Conservatives refuse to implement a proper windfall tax that would make them pay their fair share.
Labour would use a real windfall tax to stop the energy price cap going up in April. https://t.co/RyJrki0EYs— Ed Miliband (@Ed_Miliband) February 16, 2023
Scope, the disability equality charity, are calling for a social energy tariff to help disabled people through the cost of living crisis.
Tom Marsland, policy manager at disability charity Scope, said: “It's obscene that energy companies continue to make massive profits as disabled people face devastating situations because they can't afford enough energy.
“Life costs a lot more when you're disabled. We're being inundated with heart-breaking calls from disabled people who haven't eaten for days, who can't afford energy to charge wheelchairs and stairlifts, but are still racking up huge energy debts.
“As we've seen, many have been forced onto prepayment meters as a result, putting lives and health in danger.
“Energy companies need to start putting disabled customers first. We need a social energy tariff – a discounted rate – for disabled people, to put an end to sky-high energy bills.”
Read more: UK inflation falls for third straight month but remains close to 40-year high
The TUC general secretary, Paul Nowak, called for public ownership of energy companies and said: “While millions of families struggle to heat their homes, firms like Centrica are raking in monster profits.”
Greenpeace UK’s head of UK climate, Mel Evans, said: “As families up and down the country are plunged further into fuel poverty, record energy company profits line the pockets of wealthy shareholders.
“Much of Centrica’s obscene profits are coming from energy trading, but the windfall tax doesn’t cover this, nor the profits from gas-fired power stations.
“The government should expand the windfall tax immediately and use the money to fund home insulation, energy bill support and green heat. If they did, they could tackle the energy, climate and cost-of-living crises at the same time.”
British Gas faced widespread criticism earlier this month when it emerged that debt agents working for Britain’s largest energy supplier had ignored customers’ vulnerabilities and forced them on to prepayment meters to recover debts.
The scandal sparked an urgent inquiry by regulator Ofgem and has seen Centrica banned from force-fitting pre-payment meters.
In its annual results, Centrica said it was "extremely disappointed" by allegations that it sent debt agents to break into homes and install pre-payment meters.
It added: "We immediately took action to address this and are completing a thorough independent investigation."
Watch: British Gas under pressure to outline compensation for ‘mistreated’ customers
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