British Gas has reported a steep drop in profits following the recent spell of warmer weather. Residential supply operating profit fell by a quarter to £265 million, parent company Centrica said. Overall operating profit was down 35% to just over a billion.
Centrica said that as a result of the fall in profits, the average bill for a British Gas customer would be down by £90 from 2013. This is contrary to a recent report by Ofgem which said that the big six energy firms were set to double profit margins next year. In response, the energy industry accused Ofgem of using inaccurate figures.
The anticipated fall in bills this year is a result of warmer weather and energy efficiencies, rather than a fall in residential energy prices. Customer accounts also fell by 1% in the first half before stabilising once again in the second.
A spokesperson for Centrica said:
“We had warmer weather in the UK which meant that actually our average customer’s consumption of gas was down 24%. The good news from a customer’s point of view is that we expect average bills to be down 7% this year.”
The spokesperson said that although profits would be lower this year, the group was on course to return to growth in 2015. An industry analyst said that these figures were some of the worst in recent years and the timing comes as the energy industry faces a number of challenges such as falling wholesale prices and gas plants running at a loss.