Centrica, British Gas Parent, Cuts 2,300 Jobs

on February 23 2012 5:11 PM
Centrica
Gas flames are seen burning on a cooker in London. Reuters

Centrica, parent company of British Gas, slashed 2,300 jobs to save £500 million ($784.9 million) on the heels of disappointing profits brought by a mild winter that cut household energy consumption.

The utility saw a 30 percent drop in annual operating profit at British Gas to $819.5 million, or $78.58 per household, after winter arrived with much less of a fury compared with 2010-11. It led to 1,900 job cuts at Centrica's gas and power supply unit. Another 400 jobs were eliminated at the company's North American division, and the remainder came from corporate operations.

The drop in profits at British Gas was slightly offset by profit at the company's oil and gas business, which shot up 33 percent to $489.8 million.

The company's operating profit for 2011 rose one percent to $3.79 billion, a substantially low figure cut short by losses due to restructuring, as well as redundancies leading to the 2,300 job cuts.

2011 was a tough year, both for Centrica and our customers, said Sam Laidlaw, Centrica chief executive, according to the Financial Times, adding the company has transitioned to a more resilient model.

British Gas's drop came despite an 18 percent increase in gas bills and 16 percent jump in electric bills in August.

Nevertheless analysts looked favorably upon the results, calling the numbers and maneuvers a step in the right direction.

These were decent results in a difficult environment, and our view is that the majority of the bad news is behind them now, said Liberum Capital analyst Guillaume Redgwell, according to the Wall Street Journal.