By Cassie Werber
LONDON--U.K. residential gas use rose 18% at the start of 2013
due to the freezing temperatures, said major utility Centrica PLC
(CNA.LN) Monday, adding it would use any profit made during the
exceptionally cold weather to keep its prices competitive.
Centrica's interim management statement said that full-year
earnings growth was "expected to be in line with market
expectations."
The statement also underlined Centrica's plans to continue
aligning the company's U.K. and U.S. gas businesses. The company
has announced two major U.S. acquisitions relating to gas export
from the U.S. to the U.K. in the last few weeks.
"As a result of the unusual period of extended cold weather,
average residential gas consumption was 18% higher in the first
four months of 2013 than in the same period in 2012, and average
residential electricity consumption was 3% higher," Centrica's
statement said.
Centrica said "any benefit arising from the exceptionally cold
weather will be used to maintain our price competitiveness"
because, it said, the utility recognized "the economic pressures
facing many of our customers." Utilities companies in the U.K. have
previously been criticized for passing on costs to consumers and
making large profits in times of financial hardship.
The company said it had increased its tally of residential U.K.
accounts by 28,000 in the first four months of 2013, as well as
introducing tools to help customers check tariffs, and installing
over 1 million "smart meters" designed to make keeping tabs on
energy usage easier.
The U.K. government has called for all energy companies to begin
a large-scale roll-out of smart meter technology, and on Friday
extended its deadline for completion of the project by one year,
from 2019 to 2020.
In a statement that mentioned "challenging economic conditions"
more than once, Centrica said the number of U.K. businesses it
supplied with energy had fallen since the start of the year because
"continuing competitive market conditions are putting some pressure
on margins."
In terms of production, Centrica predicted a global rise to
around 75 million barrels of oil equivalent in 2013, up from 67
million in 2012, and said it expected to benefit from higher gas
prices.
Monday's statement also reiterated Centrica's plan to bring
together its U.K. and U.S. businesses via import and export
deals.
In March, Centrica announced the first deal clearly intended to
bring gas from North America to the U.K., via a contract to import
U.S. liquefied natural gas from a Louisiana plant owned by Cheniere
Energy Partners LP.
Today's statement said: "The contract is an important step in
delivering our new strategy, as we look to link our positions
across the gas value chain and invest in new sources of gas on both
sides of the Atlantic, where we see attractive opportunities."
In April, Centrica also agreed to buy a part of Suncor Energy
Inc.'s (SU) Canadian oil and gas assets in partnership with Qatar
Petroleum. In February, it announced a 500 million pound ($767.6
million) share buyback, using funds earmarked for building new
nuclear plants in the U.K.
Today's statement said that, to date, the group has re-purchased
18.7 million shares for a total cost of GBP66.5 million.
Shares at 0743 GMT up 2.7 pence, or 0.72%, at 380.20 pence in an
overall steady market.
Write to Cassie Werber, cassie.werber@dowjones.com
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