LONDON (Reuters) -British Gas owner Centrica expects its retail business to generate significantly higher first-half adjusted operating profit than in previous years, it said on Tuesday, citing reduced debt-related costs.
UK energy regulator Ofgem’s price cap provides an allowance to account for debt on energy bills that cannot be recovered by energy suppliers and would ultimately be written off.
This allows suppliers to reclaim some losses from selling at the capped prices.
While millions of British households were struggling to pay energy bills after Russia’s invasion of Ukraine sparked a surge in wholesale gas prices, the price spike and higher gas production helped to triple Centrica’s profit to a record 3.3 billion pounds ($4.14 billion) last year.
Though wholesale energy prices have fallen this year, a company statement ahead of its annual general meeting on Tuesday said that its performance over the first five months of the year has been strong overall.
Centrica expects its full-year group adjusted earnings per share to come near the top end of a predicted range between 16.5 and 24.7 pence per share.
“Uncertainties remain over the balance of the year, including the impacts of weather, commodity prices, the economic environment, any changes to regulation or government policy, asset performance and the competitive backdrop for our energy supply businesses,” its statement said.
At an annual general meeting held on Tuesday, Centrica shareholders passed all resolutions including a bonus package worth more than 3.7 million pounds for Chief Executive Chris O’Shea’s, meaning his total pay package for 2022 was worth 4.5 million pounds.
O’Shea had come under fire from some shareholders, including British asset manager abrdn who said it was not reflective of the impact of forced prepayment installations on vulnerable customers during the ongoing cost of living crisis.
Some 93% of the company’s shareholders voted to approve the directors’ remuneration packages.
The company will publish interim results on July 27.
($1 = 0.7962 pounds)
(Reporting by Nina Chestney in London and Eva Mathews in Bengaluru, additional reporting by Susanna TwidaleEditing by David Goodman and Emelia Sithole-Matarise)
