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| British Gas reports dip in profits as energy costs rise | British Gas reports dip in profits as energy costs rise |
| (35 minutes later) | |
| British Gas's residential business has reported a small drop in profits for 2013 due to warmer weather and higher wholesale energy costs. | British Gas's residential business has reported a small drop in profits for 2013 due to warmer weather and higher wholesale energy costs. |
| Adjusted operating profit for the full year came in at £571m, down 6% on the £606m recorded a year earlier. | Adjusted operating profit for the full year came in at £571m, down 6% on the £606m recorded a year earlier. |
| Owner Centrica also posted a dip in profits, at £2.7bn, down from £2.74bn. | Owner Centrica also posted a dip in profits, at £2.7bn, down from £2.74bn. |
| Earlier this month, British Gas's prices and profits were questioned by Energy Minister Ed Davey, who suggested the firm might have to be broken up. | |
| British Gas also said customer numbers had dropped by 2% in 2013 compared with the previous year. | British Gas also said customer numbers had dropped by 2% in 2013 compared with the previous year. |
| "We have made good strategic progress across the group in 2013, investing along the gas value chain to secure long term, affordable energy supplies for our customers," said Sam Laidlaw, chief executive of Centrica. | "We have made good strategic progress across the group in 2013, investing along the gas value chain to secure long term, affordable energy supplies for our customers," said Sam Laidlaw, chief executive of Centrica. |
| However, he warned that this year would "remain challenging, with margin pressures and unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation". | However, he warned that this year would "remain challenging, with margin pressures and unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation". |
| Centrica revenue for 2013 rose 11% to £26.6bn, while revenue at British Gas also rose. The company said that profits fell despite this increase in revenue because of higher "wholesale gas and electricity prices". | |
| 'Dismay' | |
| In October last year, British Gas announced an average increase of 9.2% in household energy bills. Following the government's changes to renewable energy funding, it subsequently said it was reducing prices by 3.2%. | |
| The government took action to reduce green levies after the price rises, announced by the big six energy suppliers, sparked heated political debate and caused dismay among consumers. | |
| The average dual-fuel bill in the UK is about £1,400. All the major energy companies have been criticised for continuing to raise bills, and have been called in front of MPs to explain both price rises and profit margins. | |
| In response, the companies argue that they can do little about rising wholesale costs and government levies. They also stress the need for investment to modernise the UK's energy infrastructure. | |
| Mr Davey has called on the competition authorities to investigate the profit margins of the major suppliers, although a review into the market is already being carried out by the Office of Fair Trading. |