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BORD GÁIS ENERGY’S parent company Centrica had a big fall in profits last year because of unusually warm weather in the UK.
The company, the largest residential electricity and gas supplier in both the UK and Ireland, still made an operating profit of £1.75 billion (€2.36 billion) last year – but that figure was down 35% on the 2013 figure.
It said the profits in its British Gas business, the biggest cash cow for the UK-based company, were down because of “lower consumption in a record warm year”.
However rather than hiking rates for customers to raise more money this year, Centrica vowed it would “focus on competitive pricing, customer service and operational efficiency” to boost its bottom line.
A splintering
Bord Gáis Energy was splintered off from semi-state Bord Gáis Éireann, which has now been rebranded Ervia, and sold to a consortium including Centrica and two partners for €1.1 billion last year.
It includes the semi-state’s retail business, while Ervia still owns the gas supply business – which has been renamed Gas Networks Ireland.
In Centrica’s statement today, it said the total amount it had paid for Bord Gáis Energy’s gas and electricity supply business in the Republic, which included the Whitegate power station, was €214 million.
The Irish business had 608,000 residential customers last year and ran at an operating profit of £7 million (€9.5 million) for the six months it was in the UK company’s hands.
In 2015 it expects Bord Gáis Energy to contribute about €40 million, before interest and other deductions, to the company’s bottom line.
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Sure God love them.. They only made 2.36 billion.. Times must be tough..
Not really when you put it in perspective: that 2.36 billion was an 8% return on the 30 billion capital employed in their business, they’d have made more in interest leaving that 30 billion in the bank as they wouldn’t have operating costs such as wages etc.
Is operating profit the same as net profit? Or how does it go?
really, you know a bank that will pay 8% interest on savings? any bank I’ve seen once you get to the millions the interest rates go down.
Yes it’s calculated by subtracting total expenses from total revenue. Funds employed is the value of assets employed plus working capital.
8% seems fine for a slow year… The normal expectation for investment in a business is to return 10%.
Especially in the first year. Many acquisitions don’t turn profit for the first 2-3years as they typically aren’t performing, acquired for a low price and turned around.
No Denis, interest on money in the bank doesn’t have wages and business costs deducted so the return on investment is higher with a smaller return.
No operating profit and net profit aren’t the same.
Operating profit would exclude ‘one off exceptional items’ like a restructuring cost or a write down of assets value. Also any interest paid on the companies loans.
your right boganity, but it has DIRT. 41% in this conrty
DIRT is not required to be paid on accounts where the account holder, either a person or business, is not based in Ireland.
My heart bleeds for them……….wait a minute …….actually its my pocket!!
New items on things to do list,
#46-Don’t get involved in business discussions.
#47-Read old junior cert business studies book.
#48-Re-evaluate #46
Nonsense. There isn’t a bank anywhere paying 8%. You mean 1/8 of a % maybe. ..
It’s a big hit if their budget didn’t account for the risk of a warm winter. No sympathy for as they have yet to pass on a reduction in fuel prices.
you’ll be glad to here there is one due in march. just after the warm weather kicks in
are you saying they don’t have DIRT in other country boganity.? especially the UK where Centrica is based. you might want to look into that. still your point is moot as no one is going to give you 8% on savings so their money would not be better of in a savings account.
2.33 billion is still a good profit margin for a company that is having a rough year. Can’t believe you defend them, treasure Ireland and all that.
capitialist world we live in….
My heart bleeds for them,they have been ripping us off for years.
Why is this news?
Who cares that the “only” profited €2.3 billion?
They*
Because since they’ve made a loss they’ll increase their rates, use your head champ.
These Journal stories need a sidekick “explainer guy” like they have on US crime shows so the audience can follow what’s going on without having to think.
You’re correct on interest rates Drew but we’re talking about capital, specifically shareholders funds. Its a long time since I’ve seen the inside of a lecture room but what you’re saying about write downs and restructuring is the Neo-economics that came out of Yale and Harvard in the 90′s and led to the GFC…it doesn’t apply in the real world of actually selling goods and services
Hey, can ye not balance the gender angle and have a picture of a bird sunbathing, bikini top optional of course
Rough with the smooth, there was enough made when the financial regulator granted excess of what was required and the bad winters.
It will swing in their favour again by the law of averages.
The guy in the picture is sucking it in… Just saying.
Ah sure they can take more money from our road taxes, just like their sister company Irish water!
I was wondering who’d be the first to come out with something like this. They’ve nothing to do with Irish Water.
Price increase on the way .
Ervia formaly knowen as board gais are responsible for the delivery of gas and water infrastructure services of Ireland.
True but Bord Gais Energy was the retail arm and has been sold. Not part of Ervia anymore. Bord Gais Networks is also renaming. Seen the ads?
From the article…
‘Bord Gáis Energy was splintered off from semi-state Bord Gáis Éireann, which has now been rebranded Ervia, and sold to a consortium including Centrica and two partners for €1.1 billion last year.’
Why is this news? Surely that’s business you make more profit some years than others
Concerning when energy companies themselves are confirming climate change!
One warmer year does not denote Climate Change.
But man-made Climate Change is happening and we deny it at our peril.
http://t.co/m3PFJaHar1
https://www.bostonglobe.com/metro/2015/02/18/light-snow-thursday-larger-storm-possible-this-weekend/WMOUgFGactaQqwL80DXUcJ/story.html
Luckily we have Gulf Stream to keep us warm.
Fozz. That myth has been proved. Climate change is the earths natural cycle. But sure throw some new carbon tax out there and some carbon tax credits that will solve it..
Is it not Gas Networks Ireland now
Centric a naught the ‘customer supply’ part.
No, Gas Networks Ireland still belongs to Ervia aka Bord Gáis Éireann. Confusing with the names I know… but Gas Networks handles the supply and other companies like Bord Gáis Energy handle the retail side, as Business Cat says
No, Bord Gais Eireann was Bord Gais Energy, Bord Gais Networks and Irish Water.
Since Centrica bought Bord Gais Energy they kept the brand name.
Bord Gais Eireann is now Ervia and includes Irish Water and Gas Networks Ireland (formerly Bord Gais Networks).
Bulls?ite people have not got the money to switch onn just more kenny spew
Ah janey, only €1.75 billion profit… wouldn’t your heart bleed for them?
*£
I’m sure they’ll make it back with a hefty ‘unavoidable’ raise in prices soon!
As pointed out above by John Hartigan people are not using gas [or other heating] because they can’t afford it. The heating season started for many of us late last August and our stoves have been on ever since using wood and coal and the stock which was planned to last until late April is almost gone. If we were paying for gas, oil or electricity we would be in financial difficulty as pensions are not elastic. I just don’t know how people with young children manage or indeed elderly who do not have access to timber to stretch out expensive coal or whatever. There is far too much nonsense handed out about conservation by people who do not have to suffer the consequences of their ‘advice’.
Long may the sun shine
Dont worry we will pick up the slack. Ill pay double for my gas from now on. Dont wanna see ur billions diminish
have your say