Jul 31, 2018

Centrica fears British Gas bills may have to rise again

British Gas raised the prospect of a further rise in household energy tariffs this year after parent Centrica reported a drop in operating profits in the first six months as higher wholesale prices and cold weather took their toll. Centrica said adjusted operating profit in its consumer business fell 20 per cent to £430m in the year to the end of June 2018. The group's UK household gas and electricity supply arm was hit by last year's cap on tariffs for vulnerable households, the loss of customers and rising wholesale energy prices. British Gas raised its standard variable tariff in April but Centrica said on Tuesday that wholesale costs had continued to rise and it was keeping "Wholesale energy prices and their impact on our cost of supply under review". Adjusted operating cash flow was down 11 per cent to £1.1bn. However, Centrica said it expected it to be higher for the full year than in 2017, and within its targeted range of £2.1bn-£2.3bn. Net debt is also expected to be within the group's 2018 targeted range of £2.5bn-£3bn. Group revenues rose to £15.3bn, from £14.3bn in the same period the year before.

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