British Gas profits fall despite price increases

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Profits at British Gas, the residential division of energy group Centrica, fell 34 percent last year to ┬ú379 million, on the back of a huge increase in the cost of wholesale gas.   The decline in profit came despite British Gas (which trades as Scottish Gas in Scotland) raising its gas prices to consumers by 35 percent in 2008. Centrica's overall operating profit was ┬ú1.94 billion, down 0.4 percent on a year ago.   Earlier this month, British Gas cut its standard tariff gas prices by 10 percent. Centrica chief executive Sam Laidlaw told the BBC that if wholesale prices continued to fall, the company might be able to do more to cut domestic bills. Price cuts from three of the other "big six" UK energy companies come into effect at the end of March.   Scottish & Southern will cut the price of electricity by 9 percent and gas by 4 percent from 30 March. EDF Energy has announced an average cut of 8.8 percent in electricity, while E.On has announced a 9 percent cut. Both companiesÔÇÖ gas tariffs will remain unchanged, however.   Along with its annual results, Centrica also announced the purchase of a majority stake in the Baird gas field in the North Sea, for ┬ú1.2 billion, which it will develop into a storage facility to help to tackle the lack of storage capacity in the UK.   "Whilst the overall economic climate in 2009 is clearly very challenging, the operational and structural progress we have made over the last two years has strengthened the group and positioned us well to continue to invest for our customers and our shareholders," said Laidlaw.   Centrica also said it would create 1,500 new jobs in the UK, in areas such as energy efficiency and wind farms.   *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *