By Nina Chestney
LONDON (Reuters) -British Gas owner Centrica said on Thursday its adjusted operating profit halved in the first half of this year, due to mild weather, falling wholesale energy prices and weaker returns from gas storage.
The company said its operating profit for the six months ended June 30 fell to 500 million pounds ($680 million) from just over 1 billion in the same period last year.
Core profit, or EBITDA, fell to 900 million pounds from 1.4 billion.
“The first half of 2025 has seen more challenging conditions for British Gas Energy residential and Centrica Energy, with lower commodity prices and spreads impacting our infrastructure businesses,” the company said in a statement.
Centrica’s share price was down 1.2% at 157.85 pence by 0803 GMT.
British Gas, Centrica’s retail energy arm, was hit by warmer-than-normal weather, which affected energy demand, while its gas and power trading business had fewer opportunities to deploy capital given wholesale price volatility, driven by news about U.S. tariffs, EU regulation and geopolitical factors.
However, Centrica still plans to raise its full-year dividend per share for 2025 to 5.5 pence, as announced in February, up 22% from the previous year.
“There is still much more to do across the group, including improving our commercial performance in services & solutions,” CEO Chris O’Shea said in a statement, as the division’s customer base fell 2% in the first half of the year.
Centrica’s Rough gas storage facility will make an adjusted operating loss of 50 million to 100 million pounds this year as gas price spreads have not encouraged injections, the company said.
It said the “situation is not sustainable as we move into next year” and it needs a regulatory support mechanism to be able to increase capacity at Rough and ultimately convert it into a facility that can store hydrogen.
Centrica this week announced it had signed an agreement to acquire a 15% equity stake in Britain’s new nuclear project, Sizewell C.
The group’s total funding obligation is capped at 1.3 billion pounds, and the investment will generate a return on equity of 10.8% through the construction and initial operations phase, it said.
($1 = 0.7376 pounds)
(Reporting by Nina Chestney in London and Ankita Bora and Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu, David Holmes and William Mallard)
