The company said, “Centrica has performed well in the year to date. Downstream, the UK residential energy supply business has benefited from its strong competitive position, while upstream the business continues to face low gas prices and modest clean spark spreads.”
According to Centrica, the company’s downstream UK business, British Gas, had a strong start to the year, and the number of joint energy and services households it serves grew by 50,000 in the first quarter.
At the end of April, it had over 15.9 million residential energy accounts on supply, an increase of more than 200,000 since the start of the year.
Centrica said, “Given current trading conditions, residential energy supply is expected to perform strongly in 2010 with profit heavily weighted towards the first half.”
By the end of April, the company had installed 80,000 smart meters in homes and businesses and now has over 300 employees working in our insulation business. It also remains on track to reduce the like for like cost base in British Gas by more than the GBP100m originally targeted.
In Upstream UK business, wholesale gas prices have remained low. Gas and oil volumes produced in the first quarter of 2010 were 59% higher than 2009 reflecting the additional contribution from the Venture portfolio, and full year production volumes are currently expected to be in line with previous guidance of around 300bcfe, subject to running patterns of flexible production.
In power generation, Centrica said that the operating performance of its gas fired power stations continues to be strong with reliability of the fleet running at 99% year to date.
The group’s net interest charge is expected to be close to GBP200m in 2010, and given the profit mix currently projected the group effective tax rate is anticipated to be in the 35%-40% range. Net debt at the end of March stood at GBP3.3bn, including margin cash out of GBP700m.
