British Gas profits have begun to ease from record high levels last year as the market shows signs of “normalising” after the energy crisis.
The UK’s biggest energy supplier reported operating profits of £159m for the first half of the year, down significantly from the same months last year when it reported its highest-ever first-half profits of almost £1bn.
British Gas made record high profits of £969m a year earlier after the energy watchdog, Ofgem, let it claw back more money from household bills to recoup the costs of supplying its 10 million customers during the energy crisis.
The regulator’s decision handed British Gas a £500m boost but after the one-off windfall the supplier’s profits have fallen back in line with more typical earnings.
“A large portion of British Gas Energy’s profit in 2023 was a direct result of these cost recovery allowances. Today’s number represents the transition to a more normalising energy landscape,” the company said on Thursday.
The cooling of British Gas profits led to lower earnings for its parent company, Centrica. The FTSE 100 giant reported earnings £1.1bn for the first half of the year compared with £2.3bn in the first half of last year.
Centrica’s chief executive, Chris O’Shea, said the company had performed in line with expectations in the first half of 2024, “against the backdrop of more normalised market conditions”, and signalled that it would start to compete for new customers.
He said investments in the company’s data capabilities, product innovation and customer service had driven “marked improvements in customer satisfaction” that would allow it to “continue shifting the focus to growing customer numbers”.
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British Gas had 7.48 million household customers at the end of the first half of this year, compared with 7.53 million at the same point last year. Its total customer base, including business customers, was stable at 10.2m compared with 10.26 million last year.
