Interim results for the period ended 30 June 2011

Centrica Interim results for the period ended 30 June 2011

Operating and financial overview:

• On track to deliver full year earnings growth in 2011, despite commodity price volatility, challenging economic environment and higher UK upstream gas and oil tax rates
  • shift in profits from the downstream to the upstream
  • UK residential energy operating profit* halved from the exceptional levels recorded in 2010
  • progress in challenging market conditions demonstrates the strength of Centrica’s business model
• Close management focus on cost structure and efficient deployment of capital required to maintain our competitive position and drive long-term shareholder returns
• 159,000 increase in residential energy customer accounts, reflecting competitive pricing position, Sainsbury’s and Nectar partnerships and high levels of customer service
• Full year profit* growth expected in BGS and BGB; economic environment increasingly challenging
• Upstream UK business benefiting from strong operational performance and higher commodity prices. Nuclear output up 25%, offsetting weak market environment for gas-fired power generation
• North American operating profit* up 25%; benefiting from operational improvements
• Good progress on organic investment programme
  • Lincs wind farm – onshore substation largely complete and first foundations now in place
  • Ensign gas field – first gas expected in second half of 2011; York and Rhyl developments approved
• Interim dividend follows established practice of paying 30% of prior year full year dividend

 

Statutory results:

• Operating profit^‡: £1,254m (2010: £2,117m)
• Earnings: £468m (2010: £1,386m)
• Basic earnings per ordinary share: 9.1p (2010: 26.8p)
• Profit for the period includes net exceptional charges after taxation of £260m (2010: £nil)

A definition of the profit measures used throughout these results is provided in the Group Financial Review. A reconciliation between operating profit and adjusted operating profit is provided in note 6(b) and a reconciliation between the earnings measures is provided in note 11.

Earnings and operating profit numbers are stated, throughout the Performance Overview and the Operating Review, before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements where applicable – see note 3 for definitions. In addition, all references to profit and loss are stated before share of joint venture and associate interest and tax. The Directors believe these measures assist with better understanding the underlying performance of the Group. The equivalent amounts after exceptional items and certain re-measurements are reconciled at Group level in the Group Income Statement. Exceptional items and certain remeasurements are described in note 7. Adjusted earnings and adjusted basic earnings per share are reconciled to their statutory equivalents in note 11. All current financial results listed are for the period ended 30 June 2011. All references to 'the prior period', 'the prior year', '2010' and 'last year' mean the period ended 30 June 2010 unless otherwise specified.