Centrica warns of higher energy bills for not so happy new year |
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Fri, 16 Dec 2005 17:05
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LONDON: Britain's largest energy company Centrica Plc. has warned that energy bills are set to go up for a second time as the price of fuel is rising uninterruptedly. The company, which owns British Gas, said the escalating cost of gas during the unprecedented winter this year will result in an operating loss in its residential services unit and that it is bracing for another round of staff trimming.
Centrica had already cut some 2,000 jobs in July. The proposed cuts will happen from now and end of next year and will be part of the company's plan to reduce some 30 million pounds in costs at British Gas by 2007. While is did not specify any number, it said the reduction will happen across the organisation in both U.K. and abroad. Centrica employs 28,000 in the country and 4,000 overseas.
| The company said it is paying 37 per cent more for gas this year and the average increase in electricity costs is 30 per cent. British Gas has hiked its fuel bills by 15 per cent in September.
While parts of the company's operations are hedged against higher costs, British Gas Residential Energy, which caters to 17 million customers in the country, is likely to post a second-half operating loss. However, full-year group earnings will be in line with analysts' expectations, the company said.
It said that it expected to lose 160,000 accounts in the second half of the financial year, in addition to the 764,000 lost during the second half of 2004 in the face of price-cutting by low-cost rivals.
Centrica had a net income of 1.38 billion pounds in 2004. Analysts expect it to post 2005 net in a range between 632 million pounds and 1.12 billion pounds.
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Gas prices being artificially inflated by European monopolies, claims report 