Centrica latest energy firm to post record profits
Centrica (LON: CNA) is the latest energy company to post record profits alongside BP and Shell in 2022, the company brought in £3.1 billion before tax.
The company, which owns British Gas and Spirit Energy, surpassed previous years’ profits with an operating profit of £740m in 2021.
Centrica paid just over £1 billion in tax based on its profits in 2022, meaning the company made £2.1 billion after tax. For comparison, the UK-based company paid just £454m in tax based on its profits in 2021.
Those high profits have drawn criticism as people believe utility British Gas is benefiting from customers struggling to pay their household bills as gas and electricity costs remain at exceptionally high levels.
Group Chief Executive Chris O’Shea said: “Our performance in 2022 demonstrates the benefits of our balanced portfolio and strong balance sheet.
“The energy crisis and pressure on the cost of living have created a challenging environment for customers and communities, but we have been able to provide much-needed stability and support.
“We invested £75m in supporting our energy customers in 2022, which was more than the £8 after tax profit per customer earned by British Gas Energy.
“While customers are feeling some relief from recent price drops, it remains clear that some will continue to need assistance and we will do everything we can to support them in the coming year.”
Reacting to Centrica’s earnings announcement, Mel Evans, Head of UK Climate Practice at Greenpeace UK, said: “As families across the country spiral deeper into fuel poverty, record profits from energy companies are lining the pockets of wealthy shareholders.
“Much of Centrica’s obscene profits come from energy trading, but the windfall tax doesn’t cover that, nor does gas-fired power plant profits.
“The government should immediately expand the windfall tax and use the money to fund home insulation, energy bill support and green heat.
“If they did that, they could simultaneously address the energy, climate and livelihood crises.”
Now the company plans to add £300m to its share buyback programme, on top of a plan launched late last year to buy back 5% of its issued share capital – the equivalent of around £250m
At the time, Centrica said it made the decision based on its “performance and prospects, as well as the work done over the past few years to strengthen the balance sheet and ensure adequate liquidity.”
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